Credit Equality Is Our 

 Aim — Myers 



_ Trouble Not So Much With Interest Rates As With' 



Pricesr He Says 



PERMANKXT credit eiiuality for ag- 

 riculture — that was the jroal set for 

 farmers' co-operative credit institu- 

 tions by Governor \V. I. Myers of the 

 Farm Credit Administration in his ad- 

 dress Wednesday afternoon in Ithe Hijih 

 School Auditorium at Quincy. |Speaking 

 extemporaneously, Go\% Myers^ gave a 

 clear analysis of the government's future 

 aim and its past experiences in assisting 

 farmers with their credit problems. 



"Whether or not the co-operative cred- 

 it institutions established bjj the Farm 

 Credit Administration in time come to 

 be owned entirely by farmers, depends 

 largely on the ability of the local insti- 

 tutions to operate soundly and secure 

 prompt collection of loan installments," 

 Governor Myers said. 



Not To Subsidize 



"The Federal Land Banks, the produc- 

 tion^credit associations and the banks for 

 co-operatives are not organized to lend 

 government money or subsidize the farm- 

 ing industry, but to borrow money from 

 investment markets and reloan it to 

 farmers on sound business principles. I 

 cannot emphasize too strongly," he said, 

 "that this program requires the very 

 soundest management on the part of the 

 local credit units and a high record of 

 prompt loan payments. 



"During the past year collections on 

 all types of farm loans improved decided- 

 ly and this has had a beneficial effect on- 

 the standing of the bonds and agricul- 

 tural securities of our institutions in the 

 investment markets. Continued improve- 

 ment in loan collections should further 

 increase the demand for our securities 

 and farmers will be assured of adequate 

 funds to finance their requirements at 

 reasonable rates of interest." 



Pointing to the banner to the right of 

 the stage labeled, "Lower Farm Inter- 

 est Rates," Myers said, "We can lower 

 interest rates only by cutting the return 

 to the lender, reducing the cost of dis- 

 tributing credit which includes mortgage 

 filing fees, inspection, etc., and by re- 

 ducing the number of losses. 



"We can't operate the land banks for 

 Ifss than 1% intere/t. We are'jnaking 

 progress in cutting recording fees. The 

 real trouble has been with farm prices, 

 not with interest rates. When prices 

 are where they ought to be, five percent 



FEBRl ARY, 193.5 



interest i.- fair and rear^onable. It's cost- 

 ing about that now. and at present the 

 governnwHt is 'subsidizing slightly ktng 

 term farm credit at 4 '2 ''r . You can't have 

 co-operative c^dit an<l subsidy. The 

 permanent farm credit plan must be de- 

 centralized with district and community 

 units. .And if these are to succeed farm- 

 ers must elect able, qualified directors 

 to run them.'' 



Mr. Myers pointed out that collection 

 of loan payments on Land Bank Com- 

 missioner's loans which have been made 

 to the more heavily indebted farmers im- 

 proved decidedly in 19.34. "Last ytar," 

 he said, "in spite of a terrible dmught 

 over almost half the country, more than 

 82 per cent of the matured installments 

 on Land Bank -Commissioner's loans were 

 paid. In several districts unaffected by 

 drought the collection record is well over 

 90 per cent. If heavily indebted farmers 

 could roll up a record like that during the 

 worst drought year in memory. I don'^t 

 think they will have much trouble in go- 

 ing on up toward 100 per cent payments 

 this year. 



Want Credit Standing 



"Farmers' credit co-operatives should 

 support interest rates which are reason- 

 ably low but antlequate to cover the cost 

 of running a self-supporting credit busi- 

 ness. A shot-in-the-arm in the form of a 

 subsidized interest rate may provide a 

 certain amount of temporary relief but 

 it will not build up a credit standing; for 

 agriculture. It will not help to present a 

 clear claim for a fair share of the invest- 

 ment funds of the Nation. It will not 

 help us to build up a credit system which 

 is truly co-operative and for which we 

 can obtain the support of the great ma- 

 jority of farmers who pay their debts 

 and ask a fair showing — but nothing 

 else. 



"I have an inherent belief in the abil- 

 ity of farmers to meet their obligations. 

 If I didn't I would stop being an advo- 

 cate of co-operative credit. I believe the 

 progress in co-operative credit is insep- 

 arably intertwined with other phases 

 of agricultural advancement. The plan 

 of co-operative credit through the Farm 

 Credit Administration is simple. It is to 

 provide long-term mortgage credit, sh^rt- 

 term production credit and credit for 

 farmer"^' buying and selling organizations 



Charles P. Cummings. Manager. Farmors Natioi^l 

 Grain Corporation. Peoria, congrattrlates Manager 

 Ben Esch of the Washington Gram Companjr whe 

 delivered the first Load of Corn to the new Farmers 

 National EUvator at Peoria. Manag<>r HarriaoB 

 Fahmkopf of Illinois Grain Corporation, right. Il- 

 linois Grain Corporation will hold its annual meeting 

 in Peoria, Pere Marinette Hotel, Tut*sda^^ Feb, It. 



by bdrrowiny nmncy fropi invest'ir- and 

 rcloaning it to farmers through proper- 

 ly capitalize<l and soun<lly cper.-ite.i insti- 

 tutions. I believe we can acJiieve e<iu*l- 

 ity for agriculture in the fielil of credit 

 by properly managing our credit mlB- 

 chinery and living up to the obligation of 

 meeting our loan payments promptly 

 when duo. This will enable fanners to 

 compete on equal terms for the loanable 

 funds of investors, wherever such funds 

 may be found. This system will render 

 the farmer independent of local -ources 

 of credit which may be inadequate or 

 erratic. The small cotton farmer in the 

 southernmost states, the mid-we.stern 

 grain farmer, or the isolateii cattlemen 

 in the mountain ranges of tho Pacific 

 states can draw funds from New York, 

 Chicago or San Francisco or other large- 

 investment markets." 



Producers Creamery 



Of Peoria Sells Stock 



A wider distribution of preferred stock 

 among patrons is being sought by the 

 Producers Creamery of Peoria. The par 

 value of preferred stock has been raised 

 from f 10 to $25 per share, and the rate 

 of interest fixed at seven per cent an- 

 nually. Solicitation is going forward 

 with great success in the eight surround- 

 ing counties Under the leadership of the 

 County Farm Bureaus. The object is to 

 put the Producers Creamery on the same 

 corporate basis as co-operative creameries 

 operating at Bloomington. Champai^ 

 and Olnev. 



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