24 BULLETIN 999, U. S. DEPARTMENT OF- AGRICULTURE. 



self-sufficient is necessary. This will reserve the income for payment 

 of debts and for necessary purchases. 



So far as possible credit should be extended to farmers to enable 

 them to continue to farm in an orderly but conservative manner. 



During a period of rising prices all the channels of trade tend to be 

 fully stocked. Every one tends to buy in advance of his needs. 

 Credit needs are large for the wholesale manufacturing and retail 

 agencies. Farmers then need the minimum of credit because they 

 can sell readily. When prices are falling, the tendency to buy for 

 immediate needs only, forces farmers to hold large quantities of 

 produce while waiting for a market. The sudden shift of credit needs 

 accentuated the agricultural panic. While there are likely to be 

 years of rising prices, with the resulting tendency to store in cities, 

 the general tendency for some years will probably be in the direction 

 of requiring the farmers or primary purchasers of farm products to 

 do more of the necessary holding. The tendency to falling prices, 

 uncertainties as to prices, the poverty of Europe, and uncertainties 

 as to exchange are likely to contribute to this general result. For 

 this reason the subject of agricultural credit is of more than usual 

 importance. So much of the farm credit is of long duration that 

 more of it should be furnished as investments, rather than from 

 bank credit. The experience of the past year has accentuated this 

 principle. Farmers who had mortgage payments due this year that 

 were financed from bank credit often found difficulty in obtaining 

 renewals, because the deposits had been withdrawn from the banks. 

 But land bank mortgages financed as investments have caused little 

 trouble either to the owner of the bonds or the farmer. Many agri- 

 cultural enterprises are of so long duration that it is also desirable 

 that part of the personal credit be financed as investments rather 

 than have so large a part of it financed from deposits or furnished 

 by retailers who depend on short-time credit. 



Since farm products are so very cheap, it would seem desirable to 

 increase the supply of live stock. Surplus crops stored in growing 

 animals are a good risk. There is at least a fair chance that the 

 animals will sell when feed is more valuable. 



Until Russia again becomes an exporting nation the outlook for 

 the export of wheat and rye is apparently more favorable than for 

 most other farm products. 



Ample supplies of grain and hay should be held on farms in each 

 year of excessive production. More attention should be given to 

 the storage and financing of crops in years when the weather is 

 unusually favorable so that the unexpected production which is often 

 a calamity to the farmers may be used to supplement short crops 

 that are now almost equally injurious to industry. 



