33^ AGRICULTURAL DISCONTENT 



also drafted a rural-credits bill that was later introduced in Congress as 

 the Lenroot-Anderson bill. 



Other investigations were launched by Senate and House committees, 

 but the grievances that these agencies found were also pretty much the 

 same as those presented by the commission : the lack of short-term credits, 

 high interest rates, and the want of reliable sources from which the 

 farmers could borrow. 



If there was a general agreement on the short-term-credit needs of the 

 farmers, there certainly was no such agreement about the means through 

 which this aid was to be had. Not even bloc members could agree on 

 that. Numerous bills had been introduced in Congress in 1922, conserva- 

 tive and radical, revolving chiefly around such proposals as amending the 

 Federal Land Banks, extending the life of the War Finance Corporation, 

 and increasing the credit facilities of the Federal Reserve Banks. In the 

 end, the controversy narrowed down to one between the Lenroot-Ander- 

 son measure, sponsored by the Joint Commission of Agricultural Inquiry, 

 and the Capper-McFadden bill, drawn up by Eugene Meyer, Jr., the 

 managing director of the War Finance Corporation, and based largely 

 on his experiences with this agency. 



The Capper-McFadden bill was based on the assumption that the 

 Federal Reserve System could be made to meet the needs of every type 

 of farming except livestock raising, if the Federal Reserve Banks were 

 allowed to discount paper on a nine-month instead of a six-month maturity 

 basis, and if small rural banks with capital of less than $25,000 were 

 allowed to join the system. As for the requirements of the livestock in- 

 dustry, they could be satisfied by specially created credit institutions. 



The Lenroot-Anderson bill, on the other hand, was based on the as- 

 sumption that the Federal Reserve System was incapable of providing 

 for the intermediate needs of the farmers. It sought the creation of sepa- 

 rate institutions connected with, yet independent of, the Federal Land 

 Bank System. The initial capital for these banks would be provided by the 

 United States Treasury and the funds for its operating expenses would 

 be furnished by the sale of tax-free securities. 



Strong differences existed over the relative merits of these two measures. 

 The Capper-McFadden bill was strongly supported by the livestock in- 

 dustry and the cooperative marketing associations, while the Lenroot- 



