AMERICA’S FARM CRISIS

Evening Star, Issue 18239, 2 April 1923, Page 5

AMERICA’S FARM CRISIS

ITS RELATION TO WAR. DEBT. AGRARIAN PROBLEM AND WORLD MARKETS. The fhnu bloc was en important an element in the deadlock between America and England over the war debt (.states tho ‘Westminster Gazette’) that the following article from onr Washington correspondent may help to explain the confusion. While it. is from the Middle West that the demand conics for non-in-tervention in European affairs and for the payment of the debt, there is now a movement from the same quarter for a policy which will open up foreign markets : The American fanner will become an ardent supporter of his country’s active participation in European affairs, and even of the complete cancellation of interallied' debts, should Congressional efforts fail to provide a solution for tho present critical .situation of American agricult,urc. The. farm bloc in Congress, it appears, will soon bo a pronounced advocate of American arbitration in the present world economic crisis, in order to provide again a market for the huge grain surplus now rotting in the granaries of the Middle, West. Strangely enough, it was ibis same group of Senators anil representatives from the farm belt, of tho Middle West whose foreign policy of complete American isolation made them the most outspoken foes of American membership in the League, of Nations or of any other form of co-opera-tion with European nations in the solution of post-war problems. FOREIGN MARKET. American acriculture has felt the absence of foreign markets for its products as has no other American industry. _ The manufacturing and merchandising interests arc so nearly independent of the necessity for foreign commerce that the present economic crisis has not vitally their equilibrium. This has not been tho case, however, with a farmer whose prosperity depends on Ins ability to sell his grain in foreign markets. To-day he can get only sixty-five dollars' worth of shoes, clothing, or' machinery for_ tho same amount of farm produce which he exchanged. as late as 1918 for 100 dollars worth of like commodities. _ This amounts to a decline of 55 per cent, in the value of his crops. . , The reconstruction of Americas agricultural industry is easily a quarter of a century behind that of the other industries. * In recognition of this_ problem Senator Borah, one of the leading members of the, farm bloc, recently introduced a resolution in the Senate asking the President to call a world economic conference. Congress meanwhile is searching for a, domestic solution of the agrarian problem The belief has become almost universal in the United Stales that the instability of the, farming industry is the weak spot in tho productive system Various proposals for farm legislation have been made. There aro certain general principles winch appear, however, tr lie common to all of these plans. Ihr marketing of farm products must receive groat aid, and the fanner must enjoy more convenient, easier, and longer term produciion credit. Hie farm mortgages must likewise he made easier, so ns to encourage farming units of larger acreage. RURAL CREDIT. Tho (Secretary of Agriculture, in a recent report, explained the difficulties of the present-svslem of rural credit. 'lhc Lenroot-Andcrson Bill, which has received tho support of the Administration, seeks to provide a remedy for the conditions outlined by the Secretary of Agriculture < by taking advantage of the present organisation of Federal reserve banks to supply production of credits. It authorises tho creation of farm credit annexes in Iho twelve Federal Land Banks, the Government subscribing £1,000,000 for the capital of each annexe, its total contribution being £12,000,000. The Bill permits iho farm credit annexes to rediscount farm paper having a maturity of from six months to three years for national or State banks and- tjrufit comlpanjies, ■ incorporated: livestock loan companies, farm credit companies, co-operative credit companies, or other flanking institutions. The Bill introduced by Senator Norris embodies tho more radical views. It would amend the Federal reserve, law _so that the paper of co-operative marketing associations may bo utilised for rediscount as farm paper, and would amend the Farm Loan Act to permit a maximum loan on land of £5,000. EXPORT RATES. ■ Still a third measure, sponsored by Senator Capper, authorises agricultural credit corporations to deal in farm paper of not more than nine months’ maturity and in notes of not more than three years' duration, based on live stock or dairy herds. It provides also for the establishment of tod'iscount corporations undei tho supervision of the Comptroller of the Currency, and each with a, minimum capital of £250,000, to rediscount paper handled by the credit corporations. Reduced rales for export shipments would be obtained bv operating idle vessels oiynod by tho United States, without charge except for upkeep. Internal jealousy between the advocates of farm reform, ami those who believe that American prosperity can only be obtained by a ship subsidy threatens to prevent the passage of any'of these measures. _ The result 1 will undoubtedly he, the creation of a vigorous minority of Senators and representatives from tlie farm belt, who wi.l demand a solution of their problems by American participation in European affairs.