7S 6 AGRICULTURAL ECONOMICS 



confidence, lack of convenient form, convertibility, and legality for certain 

 funds, which factors now bar the farm mortgage from a very large market. 

 We do not believe that lower rates can be obtained in any other way, and 

 least by arbitrarily trying to fix by statute either interest rate or margin of 

 profit or terms of negotiation. 



Any rural credit legislation which fails to utilize present farm 

 mortgage banking machinery and seeks to establish a wholly new 

 order of negotiating or selling agencies would be highly undesirable. 

 The experience of farm mortgage bankers, acquired through many 

 years of handling farm loans ought not to be cast aside without an 

 effort to make the largest and fullest use of it. 



242. THE BANKERS' EFFORT TO IMPROVE PERSONAL CREDIT 

 IN THE SOUTH 1 



BY JOSEPH HIRSCH 



We hope to show southern bankers, and particularly country 

 bankers, who advance to southern farmers, year after year, the money 

 necessary to produce the crop, that it is a much safer and a much 

 saner business proposition gradually to liquidate the obligations of 

 southern farmers by the gradual sale of their crop, the banks retaining 

 in their possession the notes of the fanners secured by the actual 

 collateral of cotton warehouse receipts on cotton properly insured, 

 than it is to force the immediate sale of this cotton and the immediate 

 liquidation of the farm debts by transferring this obligation to the 

 debit side of their ledgers in the shape of bills of exchange. That it 

 is much safer for a country bank to have the notes of, say, five hundred 

 farmers for $500.00 each, secured by cotton amply margined, than 

 it is to have the same $250,000 in the shape of obligations of a few 

 cotton speculators, imperfectly margined, and subject to a severe loss 

 through depreciation in price. 



In order to provide better facilities for the general storage of 

 cotton, I believe that a special committee of this organization should 

 be appointed to confer with the warehouse commissioners of the 

 various southern states, with the fire underwriters, and with the 

 Department of Agriculture, to the end that we may distribute plans 

 for the construction of up-state warehouses at a moderate cost. The 

 Texas Bankers' Warehouse Committee, in its campaign, furnished 



1 Adapted from president's report at the Conference of Cotton States Bankers, 

 New Orleans, December 6-7, 1915. Stenographic report of proceedings loaned 

 by the secretary, Mr. Moorhead Wright. 



