86 AGRICULTURAL DISCONTENT 



one studies the measures in detail he discovers that instead of profiting 

 by the experience of Europeans our legislators have proposed measures 

 which these have avoided or abandoned." The measures introduced were 

 varied in the extreme. One bill advocated that the national government 

 make direct loans to farmers from funds obtained by the sale of govern- 

 ment bonds. Another, assuming that farmers were in no position to con- 

 duct their own banking business, asked for the organization of land banks 

 by would-be lenders, who could secure funds by selling the bonds of 

 the banks. A third theory, the one brought back by the American com- 

 mission, recommended the establishment of cooperative groups of farmer- 

 borrowers who, through their associations, could secure loans from land 

 banks deriving their original capital from the United States government. 

 So marked were the differences, particularly over the last two proposals, 

 that the whole matter had to be turned over to a joint subcommittee on 

 rural credits, composed of members from both houses of Congress. The 

 result of their deliberations was a compromise measure, known as the 

 Federal Farm Loan Act, which became law on July 17, 1916. This law 

 provided two types of rural credits. One was to be furnished by a system 

 of Federal Land Banks, from which loans could be obtained only through 

 cooperative farm-loan associations organized by borrowers; the other, by 

 privately owned joint-stock land banks which could deal directly with 

 individuals in need of funds. 63 



During the period of agricultural expansion that accompanied the 

 participation of the United States in the first World War, the farmers of 

 the nation thus had the advantage of excellent marketing cooperatives for 

 dairy products, grain, and livestock, and a system of rural credits, based 

 mainly on the cooperative principle. These developments may account 

 in some measure for the success with which the farmers met the excessive 

 demands made on them by the war; and they may also explain in part 

 the land boom of the western Middle West that followed the war and 

 the disastrous collapse which it suffered. 



63. Myers, Cooperative Farm Mortgage Credit, pp. 5-6. Ruth V. Corbin, "Federal 

 Rural Credits, 1916-1936" (unpublished master's thesis, University of Wisconsin, 

 1936), sheds much light on this general subject. 



