RURAL CREDITS 



759 



etc., or that the excess quantity may be sold or converted into more 

 live stock. 



In sending out this rate sheet with the accompanying tables show- 

 ing the incomes from the all-cotton and the cotton, food, and feed 

 farms, the Texas Bankers' Association declares that the statement it 

 is asking the farmers to make is a similar one to that required of all 

 merchants seeking loans. 



The system adopted as a basis for credit is not, of course, to be 

 considered as inflexible, or as applicable to every section of the cotton 

 states. It does, however, serve as a valuable guide for determining 

 to what extent the farmer is conducting his business on sound prin- 

 ciples. It is pointed out that no bank ever cares to foreclose on 

 mortgages, and that it is most important, therefore, to have some 

 means of judging of the borrower's ability to meet his obligations. 



244. RESULTS ATTAINED UNDER THE FEDERAL RESERVE 



ACT 1 



The Board has given much attention to the adoption of appro- 

 priate measures intended to promote the ready movement of crops. 

 All this has been done upon a basis furnished by the general work 

 previously accomplished in denning commercial paper and in issuing 

 standard regulations designed to describe the essential elements of the 

 principal types. Very satisfactory results have been accomplished 

 through these efforts. The crop-moving season has been unusually 

 easy with exceptionally little strain or indication of stringency in any 

 locality. The fact that commodity paper, that is, notes and bills 

 secured by readily marketable staples, has been acquired in large 

 amounts at rates from 3 to 3! per cent, and that long-time agricultural 

 paper has, subject to the restrictions of the law, been freely taken by 

 the reserve banks whenever offered, shows what the system can do 

 for the agricultural short-time borrower. 



In order to be prepared for any contingency that might arise in 

 connection with the marketing of the cotton crop, the Board, in June, 

 1915, appointed a special committee to study the condition and needs 

 of the cotton-growing districts. The committee, realizing the impor- 

 tance of fostering a financial condition in which producers would not be 

 obliged to sacrifice their cotton, but would be assisted in the gradual 

 and orderly marketing of the crop, began its work by investigating 



1 Adapted from Second Annual Report of the Federal Reserve Board, pp. 3-9-, 

 70, 324. 



