119 



The head of a large banking institution in Chicago has made the fol- 

 lowing statement: 



"In a period of the greatest stringency ever known in the rural 

 districts, the Federal Reserve System, with its six billion of assets, 

 held less than 4 per cent of its assets in agricultural and live stock 

 paper. Now, it is said that 54 per cent of the total deposits of the coun- 

 try originate in these small rural banks. On that basis they should 

 be entitled to at least one-half the loanable funds of the Federal Reserve 

 System, or three billion instead of the 230 million of livestock and agri- 

 cultural paper held by Federal Reserve banks on July 31, 1921, and, 

 based on proportionate part of wealth of the Nation, they would be en- 

 titled to over two billion of credit." 



Such a condition of affairs is inexcusable. You are furnishing the credit 

 for other people to speculate with. You are furnishing the credit for other 

 people to make the middlemen's profits. The present financial legislation 

 is devised to help establish long-term credits. This is taken care of under 

 the Farm Land Bank Law. The bulk of the banking of the country is done 

 on 30 to 90 day paper. In order to constitute agricultural paper certain 

 specific requirements must be met and even then the longest time is six 

 months. Where the average turnover in an industry is a year and the turn- 

 over extends over a period of three years, as it does in the live stock indus- 

 try, there is something lacking, there is a hiatus in our financial legislation. 

 We must take care of that paper which is not the short term paper nor the 

 extremely long term paper. We believe the achievement of this result 

 constitutes one of the great tasks ahead of us. The stablishment and main- 

 tenance of a more adequate agricultural credit is one of the problems before 

 the American farmer at the present time. 



PRODUCTION COST IMPORTANT. 



I should like to discuss briefly that old, old problem that we have in- 

 herited from our grandfathers the tariff question but time forbids. Suf- 

 fice it to say that you farmers must prove to the officials at Washington the 

 difference between the cost of production at home and abroad. That is what 

 the manufacturer docs; that is what he has been doing for the past fifty 

 years when tariff laws have been framed. The farmers, collectively, have 

 never undertaken that task in a systematic, business like way. Unless you 

 do this, you cannot expect to be protected against the low priced lands and 

 miserable living conditions of foreign nations. 



At the present time there are many groups, many organizations of farm- 

 ers, appealing to you for their support. Many of these are officered by 

 honest, able men. I shall not indulge in any attack on any group of organ- 

 ized farmers in this state or any other state. By the slow processes of ex- 

 perience you will learn whom you can trust. 



WHAT ORGANIZATION HAS ACCOMPLISHED. 



In conclusion, I desire to review briefly some of the achievements of 

 organized agriculture: 



First. During the past year you have helped to write upon the federal 

 statute books a law providing for the federal regulation of our grain ex- 

 changes. That is just as momentous an event in the history of the grain 

 industry as was the original enactment of the Interstate Commerce Law in 

 the railroad industry. It is for the same purpose; regulation. For the 

 first time in the history of our people we have provided for government 

 regulation and control of these great public market places. 



Second. For the first time in the history of the United States we have 

 a law providing for the governmental regulation and control of the live 

 stock exchanges and the packing industry. The American Farm Bureau 

 Federation did some strong, forcible work in connection with the enactment 

 of this legislation. 



