1937 Corn Loan 



\J^^^ HE 1937 corn loan program as 

 — 'i^ recently announced by Sec- 

 ^^ retary of Agriculture, Henry 

 A. Wallace provides for a loan which 

 in effect varies from 44c to 50c a 

 bushel depending on the moisture con- 

 tent of the corn. 



Two and one-half cubic feet of corn 

 testing I4I/2 per cent or less in mois- 

 ture will be regarded as a bushel of 

 corn eligible for a loan of 50c. For 

 each one per cent increase in the 

 moisture content of the corn in excess 

 of 14'/^ per cent there will be a de- 

 duction of 2 per cent in the bushels of 

 corn as determined by the cubic con- 

 tent of the sealed cribs. No loans will 

 be made on corn having a moisture 

 content in excess of 2OI/2 per cent. 



The following table shows the ad- 

 justment in volume which would be 

 made on 2500 cubic feet of space with 

 corn the moisture content of which 

 ranges up to 20I/2 per cent 



that the 1937 corn loan be not en- 

 cumbered with technical requirements 

 and red tape such as moisture provi- 

 sions, President Earl C. Smith made 

 the following statement on Nov. 4: — 



"Farmers of Illinois and the corn 

 belt are keenly disappointed over fail- 

 ure of the Administration to announce 

 a corn loan in an amount substantially 

 equivalent to the support given the 

 1937 cotton crop. 



"If press reports of a 50 cent per 

 bushel loan with a graduation down- 

 ward on corn testing in excess of 

 14.5 per cent moisture, are correct, 

 the program will result in a break- 

 down of the popular support corn 

 loans have previously received from 

 farmers throughout the corn belt. 



"Every economic factor justifies a 

 corn loan of 60 cents per bushel. 

 And every practical experience fails 

 to justify technical requirements in 

 the administration of such a program. 



Loans will be available only to farm- 

 ers who participated in, and whose 

 farms qualified for payments under, 

 the 1937 Agricultural Conservation 

 Program in the States of Illinois, Iowa, 

 and certain "corn limit" areas in the 

 States of Indiana, Minnesota, Missouri, 

 Nebraska, Ohio. .South Dakota and 

 Wisconsin. 



The loans will bear 4 percent in- 

 terest and will be available between 

 December 1, 1937 and April 1, 1938. 

 The loans will mature 10 months from 

 their respective dates, but in no event 

 later than November 1, 1938. 



The Illinois Agricultural Association 

 urged that the loan be fixed at 60c 

 per bushel of 4400 cubic inches of 

 marketable corn stored in an acceptable 

 crib having a good roof, a tight floor, 

 and otherwise suitable for proper stor- 

 age. 



The lAA is informed that pressure 

 from deficit corn areas for lower loans, 

 together with the attitude of the Recon- 

 struction Finance Company, the source 

 of all commodity loan funds, resulted 

 in the disappointing decision reached. 



After having urged since last April 



"Statistical surpluses which are large- 

 ly responsible for the current collapse 

 of the corn price are a myth. Nor- 

 mally we carry over from 150 to 200 

 million bushels of corn. The short 

 crop of 1936 followed by the Septem- 

 ber squeeze in the cash market com- 

 pletely removed any appreciable re- 

 maining portion of a normal carry- 

 over. This fact, coupled with a season 

 in which corn is matured fully two 

 weeks early, has meant that large quan- 

 tities of new corn have been and are 

 being fed and sold which normally 

 would not be touched until later in 

 the year when the supplies of old corn 

 are exhausted. 



"The corn loan program as reported 

 in the press reflects a tendency of 

 the Administration to weaken in its 

 determination to use every practical 

 and sound means to support basic com- 

 modity price levels. Experience has 

 proved that substantial loans on corn 

 can be a great factor in supporting 

 price levels during harvest and in 

 seasons of large volume marketing. It 

 is to be regretted that -at least 60 

 cent loans have not been authorized. 



Fight for Pope-McGiU BiU 



(Continued i<om pjge 4) 

 corn surplus in any year is estimated at 

 5 to 6 per cent above "normal," the 

 loan rate would be 70 per cent of the 

 parity price. When there is no surplus 

 above "normal" the loan rate would be 

 85 per cent of parity. The I'arm Bureau 

 is also supporting a plan to divide the 

 funds appropriated to administer the 

 program on a fair regional basis. Thus 

 the funds allotted to corn would be used 

 as far as they go to make parity payments. 

 AAA officials hold that Schedule A 

 which fixes the commodity loan rate and 

 parity payments is too rigid, that the 

 emphasis should be placed on parity in- 

 come rather than parity price. 



Tl-.is backing away from parity prices 

 and growing consumer-mindedness is il 

 lustrated by the remarks of Secretary 

 Henr)' >X'allace in his address before the 

 corn belt meeting at Indiana[X)lis Nov. 

 S when he said: "With ordinary growing 

 conditions, farmers can maintain parity 

 prices for hogs and corn only throui:!) 

 regimenting themselves and their produc- 

 tion more drastically than they have 

 thought of doing thus far. I do not be- 

 lieve farmers of the Corn Belt are pre- 

 pared to regiment themselves so rigor- 

 ously. Besiilcs, I do not think they need 

 to Vi'licn farmers take into account their 

 gains in efficiency both in growing com 

 .ind in feeding corn "to hogs, they will 

 see that a price level for hogs and corn 

 moderately below pre-war parity will give 

 them their maximum income an*! at the 

 same time protect the consumer. . . . 



"Looking at the problem from the 

 standpoint of both farmers and con 

 sumers, how many hogs should the 

 farmer of the United States plan to 

 produce and sell each year? Department 

 of Agriculture studies indicate that, with 

 a national income of "0 billion dollars 

 as in 193~, the farmers should be able 

 to sell to Federally inspected packers 91'^ 

 to 10 billion pounds of hog flesh on the 

 hoof, .It a price averaging around SS 00 

 to S8.5() per hundred pounds at tlie 

 p.icking plant, or S".'iO to SHOO on the 

 farm. This would mean production of 

 about 431 1 million hogs each year for 

 Federally inspected slaughter. It would 

 mean a pork supply for consimiers SO 



W'/ntinutJ on fij^e .'.?. Column 2) 



thus automatically increasing the total 

 value of the 1937 corn crop by at 

 least one-quarter billion dollars. 



"The corn loan program as an- 

 nounced, furnishes convincing evi- 

 dence of the necessity of spelling out 

 in much detail the provisions of a 

 permanent farm law, thus limiting the 

 discretionary power vested in its ad- 

 ministration." 



DECEMBER. 1937 



