Aid offered by the War Finance Corporation is a wonderful boon to the farmers of this state making it possible for many of them to be carried over until another crop period, forestalling the necessity of disposing of their live stock and commodities at a reduced price. It has been a wonderful help in relieving the credit situation among the country banks. In fact it is a life saver to the agriculturists of this State. Your War Finance Corporation has done wonders for the sheep industry. Of course, the tariff agitation is aiding in the price of wool, but the very fact that all of these sheep have not gone on the market this season and with the knowledge that many of them are to be taken care of for three years, has stimulated the industry beyond belief. The effect of it all, as we view it, is that many of the outfits will be able to finance themselves within another year. The effect of the work of the corporation on the agricultural and live-stock interests of our State was very marked. * The War Finance Corporation stepped * * * * * in just at a time when the outlook for agricultural interests was exceedingly dark. The farmers were loaded down with debt for making a former crop and their present crop was not selling for enough to meet expenses, much less make a profit. At this critical time the War Finance Corporation threw its resources into the breach and gave to the agricultural interests the confidence necessary to go ahead. At the time the War Finance Corporation began its operations the country banks were loaded up with paper that the farmers were unable to pay because they could not make a profit on the products of the farm. The metropolitan banks were also loaded up with notes from the country banks, secured by this paper. * * * As a result of the activities of the War Finance Corporation in this State, the banks were encouraged to lend new money to the farmers to enable them to make new crops and market their old crops, because the banks knew that if they did so and were unable to carry the load themselves, that they could go to the War Finance Corporation and get relief for a period sufficient to permit the farmer to work out both the old debt, which represented a loss, and the new debt, which represented a crop in the making. It was this renewed confidence, as much as the actual money loaned, which was a vital factor in the rejuvenation of agricultural interests and in the financing of them by the country and city banks. * While the War Finance Corporation did actually give a great deal of very practical assistance in the lending of money, the most far-reaching result of its activities was the renewal of confidence that was inspired generally by the fact that a great financially resourceful government agency was ready to relieve those who were struggling to finance the agricultural interests. * * * * The assistance given the cotton growers of this district through your advances * had a tremendous effect the past season in stabilizing the market, and had it not been for your timely assistance I dread to think of what might have happened. Not only did the War Finance Corporation extend to us the financial aid needed, but by its advice and direction assisted us in working out an orderly marketing policy so that all danger of speculation on the part of the grower was avoided. The assurance that the War Finance Corporation was prepared to assist the growers had a most stimulating effect on local banking interests, who, with the assurance that the War Finance Corporation was behind the growers, as a rule adopted a more liberal policy as to their own loans. Another fact that was very manifest in the work of the War Finance Corporation in this State, not only in connection with its loans on cotton but on its live-stock loans, was the establishment of a feeling among the people and commercial interests of increased confidence in the situation. The psychology of this feeling was most interesting, and, in my opinion, was one of the most outstanding results of the operations of the War Finance Corporation. * * It is my belief that the work of the War Finance Corporation has awakened the people of the Nation to the fundamental fact that unless the buying power of the farmer and stockman is maintained the business of the Nation must necessarily languish. The work of the corporation in this State has had the effect of giving the live-stock growers more confidence. Just prior to the corporation's activities here, they were greatly disheartened because all indications were they would probably be closed out for the reason that the banks were overloaded with their paper, and with the slump in the market, it was necessary that stringent measures be taken at once. * * * Second only to the preservation of the breeding herds is the fact that the funds received from the corporation have enabled the banks of the State, both State and national, to continue doing a general business. I am sure that the relief received from the corporation has kept the doors of quite a number of weak banks open. * * * The State as a whole took a new lease on life when it realized that its most important industry had been temporarily saved from the utter destruction which had seemed so imminent. Every one here recognizes the great benefit to agricultural conditions the work of the War Finance Corporation. * * * The truth of the matter is that at the time the War Finance Corporation commenced operating in this State, there was not only an utter lack of confidence but it looked as if a very large number of the banks in this State would be compelled to go to the wall and that the condition of the farming classes would be greatly damaged, not only by shortness of crops but by a lack of confidence in the prices that were expected to rule the agricultural products. The immediate effect of the work of the corporation * was to restore confidence, not only to the small banks that were very badly distended but also to the farmers and those dependent upon them. * * In my opinion the restored confidence was worth really as much as the money put out. * * * * * * * * * * * The best proof of the work of the War Finance Corporation is seen in the general conditions throughout this State now. * The general depression brought about by the great reduction in prices completely paralyzed business. From this condition the main relief that came was through the War Finance Corporation and its operations here. A year ago * * agriculture, our most important and basic industry, without * * the health of which nothing else can prosper, was sick unto death. Cotton, our principal export commodity, dropped perpendicularly in price 75 per cent. Good spinnable cotton was a drug on the market at prices far below what it could be produced for under normal cost conditions. The live-stock industry was in extremis. * Means were not in sight of meeting maturing obligations, either by liquidation or further borrowing. The country's breeding herds were being thrown in distress on weak and overloaded markets, making confusion worse confounded. * * * * Wool, hides, tobacco, cereals, sugar-in short, all agricultural products and the basic commodities of the country generally were in a similar state of demoralization. Many of the products of the farms would not bring the cost of the freight to market. Cotton was being abandoned in the fields because it would not pay to pick it. Purchasing power, debt-paying power, were becoming paralyzed. Confidence and credit were on the run. The air was surcharged with disaster. The future loomed darkly. * * * * * * * * From the moment of the advent on the scene of the War Finance Corporation * confidence daily increased and the general situation began to mend. The assurance to the live-stock interests of credit support in a large way over a sufficient period of time and at living rates of interest had the immediate effect of encouraging the purchase of stock cattle for restocking purposes and of taking the pressure of distress cattle off the markets. Prices reacted promptly and kept advancing. Undermargined loans changed from bad loans to good loans. The same was true of cotton. * Similar results followed similar credit support to many other commodities. Widespread aid was given to the small country banks in the most distressed sections, undoubtedly preventing failures on a large scale. The country banks, relieved of the burden of cattle, cotton, and other loans in large volume (and above all with the assurance of credit support over sufficient time for orderly marketing), became considerably "unfrozen,' and were able to function again and extend help on a large scale to the small borrowers who sorely needed it. were kept in business and tens of thousands were saved from forced liquidation at a time when forced liquidation would have seriously crippled their ability to make a. living for themselves and their families. This work has been of especial value in connection with cooperative marketing by farmers. Advances by the corporation enabled many of these associations for marketing to function properly last year where otherwise they would have been unable to do so, thus resulting in restoration of confidence and stabilization of price of farm products to a very considerable degree. * * For the two or three year period prior to the agricultural operations of the War Finance Corporation the live-stock industry suffered probably the most severe blow in its history. * With the resultant decrease in the herds and flocks, brought about by forced liquidation, and the inability of the stockman to pay for feed, the farmer was unable to find a market for all his hay, and that which was sold brought a price much below the cost of production. In the late fall of 1921 the banks and loan companies previously financing the live-stock industry generally were unable to extend the financing necessary for purchase of winter feed, lambing expense, etc. Outfits with very little indebtedness were having difficulty in obtaining proper financing as well as those more extended. At this stage, when a general collapse was imminent, the War Finance Corporation stepped into the field and credit was made available for the live-stock industry to the extent that any worthy, dependable stockman could receive a fairly liberal loan on his security. I think without exception that the reasonable demands or requirements of the reliable stockmen * * * have been met; that the relief of the War Finance Corporation has extended to every avenue of the live-stock industry requiring assistance. In referring to the live-stock industry I speak of the range cattle and sheep business. These advances not only protected the live-stock industry but brought about a considerable liquidation in country banks, thus putting those institutions in a better position to protect the interests of the farmer. With the financial assistance given the live-stock industry, the tendency now is to rebuild the flocks and herds. The increasing numbers of live stock, with the improved financial condition of the live-stock industry, provides a much more satisfactory market for the farmers' hay, a crop which comprises 35 per cent of the total acreage of farmed crops within the State. * * * The loans made to cattlemen by the War Finance Corporation enabled them to hold their cattle instead of having them thrown on the market when there was no market. This applies also to loans on sheep. A great many of these loans were taken up from banks which were carrying them and thus relieved the financial situation in that way, and perhaps saved å number of banks from closing their doors. Aside from the direct financial benefit accruing to the various associations and their individual members from these advances, it is my judgment that the War Finance Corporation has rendered the greatest possible service to the cooperative movement for the orderly and intelligent marketing of agricultural products in this country. It was not so much the money advanced as the fact that a definite commitment was made. * * * This decisive step by a body of the recognized financial authority and influence of the War Finance Corporation aroused the local bankers throughout the country to take note of the fundamental merit of the proposition and to follow the example of the corporation. The local bankers proceeded to furnish credit facilities to their own growers. The movement thus started by the War Finance Corporation met the deepest need of the agricultural interests-the gradual and firm establishment of confidence in the fundamental soundness of the business of farming. * * * In my opinion, it is not too strong to say that the activities of the War Finance Corporation actually saved the live-stock interests in the West. That is the sentiment which has been expressed to me by a number of bankers in that territory. The benefits to the cotton-growing interests have been almost as pronounced. I think the results from a psychological point of view have been far in excess of the immediate benefits derived from the use of your funds. The effect of the work of the corporation on the agricultural and live-stock interests in this country has been most splendid indeed, and but for the War Finance Corporation's aid many of our men that are on the high road to prosperity to-day who are engaged in live-stock and agricultural pursuits would be ruined. The War Finance Corporation has been of great benefit to the State because of the assistance it has afforded to the agricultural industry upon whose welfare the prosperity of the State so largely depends. The credit extended * * * even more than the loans it has actually made enabled the growers of the State's most important crop to carry it past the extreme depression which prevailed last year and to market it, as it has been wanted, in the same manner as the successful merchant sells his goods. The result has been that the financial condition of that portion of the people engaged in farming has been vastly improved. As a larger percentage of the population of this State is engaged in farming than in any other industry-if indeed it is not larger than in all others combined-every sort of business has shared in the beneficial effect of the change in the condition of the farmer. * * The outlook of the whole State has changed with its financial condition and this change has turned despondency into confidence and stagnation into activity. The effect of the work of the corporation on the agricultural and live-stock interests has been most helpful indeed. It rendered assistance at a time when it was sorely needed and could not readily be had elsewhere, and by reason of the fact that that assistance was forthcoming there was a beneficial psychological effect. It gave courage to those needing financial assistance and it made it possible for all worthy of credit to secure it. * * It was fortunate that there was a War Finance Corporation during the critical months. * It is no difficult matter to picture the situation that might have confronted the country had not the War Finance Corporation stepped in at the crucial moment to save, first, the cotton-growing industry, then agriculture, and finally the live stock interests. These accomplishments * * were key activities, the effect of which benefited and stimulated the entire economic, commercial, and industrial structure of the country. * Only those who were themselves in extremity are competent to appreciate the true measure and real significance of the help given at this juncture by the renewed activities of the War Finance Corporation. Speaking for the cotton growers, I have no hesitancy in saying that to them it was "like the shadow of a great rock in a weary land." * * * I am willing to express the conviction that the revival in all lines of American industry, which is apparently now safely in view, is due primarily and principally to the work of the War Finance Corporation. I am not inclined to say that the country would never have recovered without this help, but I do most earnestly feel that the recovery would have been painfully and dangerously prolonged without it. And the suffering and disaster would have been increased in proportion to the delay. * * * * * * I would characterize the effect of the work of the corporation on the banking, agricultural, live stock, and general commercial interests of the country as vitally important and in the highest degree successful. When the War Finance Corporation began to function, about the 1st of October, 1921, the agricultural and live-stock interests in this territory were in a demoralized condition. Farm products were bringing, in most cases, a figure which was quite below the cost of production. There was practically no live-stock market, excepting that afforded by the packers, and the growers were being compelled to sacrifice their breeding stocks, although they needed additional live stock to consume the surplus feed and utilize the ranches. * * * When it became apparent that the directors at Washington had a full appreciation of the emergencies which existed, and when advances began to be made promptly to the growers, doubts were dispelled and we began to have a market for live stock which had theretofore not existed. * * * * * * For a number of years past it had been the custom of growers to pledge their live stock to cattle loan companies and thereafter depend, in most cases, on the local banks for advances to cover running expenses, which were secured by second mortgages or by mere notes of hand. When the calamitous and sudden drop in prices occurred many of these local banks were in a precarious condition. Some stockmen were threatening to leave their flocks and herds, which at that time could not be sold for enough to satisfy the first mortgage held by the cattle loan companies. The intervention of the War Finance Corporation in the situation undoubtedly had the effect of keeping many banks open which perhaps would have been compelled to suspend payment. These banks are doing business to-day; a fact which may be attributed to the benefits, direct and indirect, derived from the operation of the corporation. * * * In most cases the farmers and growers were greatly indebted to the local merchants, with little or no prospect of being able to retire their indebtedness. They were purchasing only the barest necessities, and, as a consequence, the buying power of the country was exceedingly limited. Now, however, conditions are improved to such an extent that growers are making payments on their obligations; and they are buying carefully and with economical judgment. This has led, on the whole, to a marked improvement in general business. It is difficult for those who were not in touch with conditions during the summer and fall of 1921 to realize the feeling of despair and even bitterness which prevailed throughout the agricultural and live-stock districts. During the war, many farmers and live-stock men, responding to the urgent appeals of the Government for additional production, increased their land holdings and their flocks, and they found themselves possessed of goods which they were unable to sell, excepting at ruinous prices, and, because of the extended condition of the local banks, there was no source to which they could turn for aid to tide them over until prices returned to normal figures. * * * The feeling is prevalent that the War Finance Corporation has done a great work. Even those who have not actually received direct benefits in the way of advances realize that they have shared in the improved conditions. The work of the War Finance Corporation has been of untold benefit to agriculture and the live-stock interests. The advance of large lines of credit enabled breeding herds to be carried over intact. It enabled the banks to extend their loans against farmers' notes and prevented wholesale foreclosure and liquidation of the security behind these notes in a highly disturbed market. * * * * * It afforded a great deal of relief to country banks in general and to State banks in particular. * In many cases it does not seem possible that certain banks could have been kept open were it not for the services rendered by the War Finance Corporation. The War Finance Corporation through extension of credit to agricultural communities and through the steadying influence which it thereby exerted, was a large factor in the reestablishment of farm buying power. The improved conditions which have been experienced during the past month-in the bringing about of which the War Finance Corporation has been a factor-have tended to improve social conditions, have tended to relieve the tension under which many who considered their condition helpless were laboring, have equipped them with renewed determination to succeed, have made it possible for many to stay on the land with their live stock who otherwise might have, and undoubtedly would have, been forced to give up the business. The effect of the work of the corporation on the agricultural and live-stock interests has undoubtedly been beneficial, as in the beginning, without forcing the commodities of the agricultural and live-stock interests on the market, it provided a means whereby they could continue their operations. * * * The activities of the corporation have been of benefit to our agricultural industry in that the farmer has been able through the assistance of the War Finance Corporation to relieve his bank, to at least a large extent, of the indebtedness which they were carrying secured on barnyard collateral, which represented in many cases borrowings for the purpose of financing crops, which on account of the heavy expense incurred could not be repaid out of the crop proceeds, the values of which have depreciated greatly. The result in many instances would have been the forcing of the bank to collect in on such loans due to the continually shrinking deposits, and would have left the farm borrower without means to continue further operations. * * * |