Illinois Farmers Make Good 



Use of Production Credit 



y#S EACH decade adds to the 



y uL. cash outlays required by 



/^^•^ / farmers for efficient oper- 

 ation of their farm units, they are to- 

 day recognizing that credit is as neces- 

 sary as any other piece of equipment. 

 More and more they are using coop- 

 erative short-term credit supplied by 

 the 21 production credit associations 

 shown on the accompanying map to 

 supply this operating credit. 



It was early in October five years 

 ago that the first credit association loan 

 in the United States was made by the 

 Production Credit Association at 

 Champaign, Illinois. This was a loan 

 for $830 to buy feeder cattle. 



One after another, farmers whose 

 management and operations are so 

 sound they normally would have no 

 difficulty in obtaining credit from any 

 source have become production credit 

 association members. Before the sys- 

 tem was five years old more than a mil- 



ONE MTLUON LOANS HAVE BEEN 

 made since Ed Bates of Tolono (right) 

 applied for the first PCA loan in the U.S. 

 M. E. Voile oi the Champaign, 111. Pro- 

 duction Credit Ass'n is shown taking the 

 application. 



anything about money legislation or a more 

 effective acreage adjustment program. Not 

 until farm prices hit the toboggan in the 

 early fall of 1937 did Congressional leaders 

 become active. As a result the Farm Bureau's 

 Pope McGill bill was shelved and the AAA 

 of '38 carrying the essential principles of the 

 Farm Bureau oill was not enacted until Feb- 

 ruary 1938. Money legislation was lost in the 

 shuffle. Legislation to bring about a com- 

 modity dollar will probably be a subject for 

 discussion and resolution at the coming AFBF 

 meeting in New Orleans in December. — Editor 



lion loans had been made. More than 

 a billion dollars have been loaned to 

 be used by farmers in buying feeder cat- 

 tle, pigs and lambs; in building breeding 

 herds and flocks; in financing dairy 

 operations; in producing crops; in pay- 

 ing taxes, insurance and farm mortgage 

 interest; in buying feed, seed, fertil- 

 izer, lime, fence, machinery and half 

 a hundred other purposes that can be 

 included in a list of practical farm op- 

 erations. The production credit asso- 

 ciation advice to farmers — "Don't 

 borrow money unless a loan will help 

 you make a profit" — does not limit 

 the purpose for which loans may be 

 made, but does limit them to practical 

 and, as far as can be determined, prof- 

 itable operations. 



Today the 21 production credit as- 

 sociations in Illinois, and 535 in the 

 United States, serve every agricultural 

 community in state and nation. In 

 the last few weeks of 1933 and during 

 1934 Illinois farmers borrowed a little 

 over two million dollars. In 1935 

 their loans totaled over five million; 

 in 1936 nearly nine million; in 1937 

 nearly eleven million; and for the first 

 nine months of the year they obtained 

 from their 21 production credit asso- 

 ciations nine and one-half million or 

 18.34 per cent more than in the same 

 period of last year. The growth has 

 been steady — manifesting the grow- 

 ing acceptance of cooperative principles 

 as applied to seasonal farm credit dur- 

 ing a period when farmers were find- 

 ing it progressively easier to borrow 

 from non-cooperative sources. 



Certainly a part of the growth of 

 the associations in Illinois can be at- 

 tributed to the fact that they are co- 

 operative. In the same way farmers 

 receive cooperative purchasing service 

 from their farm supply company, mar- 

 keting service from their creamery as- 

 sociation, and business service from 

 their cold storage locker plant, they 

 receive cooperative credit service from 

 their production credit association. It 

 is on this cooperative foundation that 

 the permanence of the production cred- 

 it system depends. That the farmers 

 who borrow from the production credit 

 association own the voting stock of 

 these associations gives agriculture 

 greater assurance than it has ever had 

 that it will have a source of credit 

 available in bad times as well as good. 



vavlcv m- \. a 

 ■ — 1h«" 1 ^ 



piTTifiiteJ 



>1 



■•"— OtCATU<# 



I CAKLINVII. 



'"8'""T'i.^^ ^"'^ 



"~JL-.. 



Where 

 Production 

 Credit Associa- 

 tions are Located 

 in Illinois 



^-1 •&..:z~ 



ILL rmlrr^ Suw* 



-.StH. ..... t— 



-) 



isrs 



.^1=^. 



S^^ 



p^ 





Every farmer who obtains a produc- 

 tion credit association loan purchases 

 stock in the local association equival- 

 ent to five per cent of the amount of 

 the loan. In return for this invest- 

 ment members have the privilege of 

 voting in the affairs of their associa- 

 tion. Illinois farmers consider this 

 voting privilege a worthwhile posses- 

 sion if we are to judge by the fact 

 that 30.6 |>er cent of the entire mem- 

 bership attended the last annual meet- 

 ings. 



They own more than one-half mil- 

 lion dollars of voting stock in their 

 associations and the Production Credit 

 Corporation of St. Louis owns an ad- 

 ditional $2,225,000. This Government 

 investment represented in non-voting 

 stock held by the Production Credit 

 Corporation, is similar to the pre- 

 ferred stock held by the Reconstruction 

 Finance Corporation, in commercial 

 banks. It will be retired when the 

 associations have built up sufficient re- 

 serves so they will be able to weather 

 periods of adversity. 



The management of each association 

 is vested in a board of five directors 

 elected from the membership at the an- 

 nual meeting. The directors determine 

 policies, hire the secretary-treasurer 

 and other employees, and select two 

 of their number to act with the secre- 

 tary-treasurer as an executive commit- 

 tee. The committee reviews each ap- 



NOVEMBER. 1938 



