have more State banks exercise the privilege of membership in the Federal reserve system.

3. That the maximum basis of loans from farm loan banks be raised from $10,000 to $25,000.

4. That adequate opportunity be presented for the creation of agricultural credit corporations with sufficient minimum capital to purchase or discount ordinary agricultural paper, with a maximum maturity paper of nine months and live-stock paper with a maturity of not more than three years; with rediscount corporations adequately capitalized to purchase such paper from agricultural credit corporations, with the privilege of rediscounting any such paper with its indorsement through the Federal reserve system.

5. That a farm credits department in the Federal land banks be set up in each of the land banks with a capital of $5,000,000, making a total of $60,000,000 capitalized, against which credits may be issued to the extent of approximately $600,000,000, and that these farm credits departments of the Federal farm banks be authorized to discount or purchase agricultural paper in a broad sense and to make loans or advance directly to cooperative marketing associations and agricultural cooperative credit organizations.

6. That the right of the Federal land banks to purchase production credits shall be limited to production credits where the note of the individual is indorsed by the cooperative credit association or is secured by a chattel mortgage on implements or animals, or both, and indorsed by the local banks, or where the note or draft itself is made by a cooperative credit association of producers, and that any Federal land bank may exercise any of the powers herein granted in any section or distret of the United States.

We further recommend that the Committee on Banking and Currency of the House and Senate be requested to consider these suggestions and to combine them, if possible, into a rural credits act to be introduced in such way as the committee may deem advisable.

The council announces as its policy that the cooperative marketing associations do not ask anything from the Federal Government except that legislation be enacted to permit farmers and farmers' organizations to have the same access to the Federal credits system, adapted to its needs, that all industries now possess, and to make provision for unforeseen emergencies by setting up a last reserve in such a manner as is above suggested in the farm credits department of the farm land banks.

RESOLUTION ADOPTED BY NEVADA LAND AND LIVE STOCK ASSOCIATION.

PROPER FINANCING AN ADEQUATE SUPPLY OF CREDIT FOR PERIODS SUITED TO THE TIME REQUIRED FOR TURNOVER OF OUR CROPS AND AT REASONABLE INTEREST RATES.

National legislation is now pending along this line in Congress, and of particular interest to Nevada is the Capper Federal agricultural credits bill, as well as that bill providing for an increase in the loan limit to individual borrowers of from $10,000 to $25,000 of Federal land bank funds. The Capper bill was drafted in conference between Government officials and a committee of western representatives selected through our national live-stock association and represents the best combined judgment of these men. It is not anticipated that difficulty will be encountered in securing legislation along the above lines. If special support is needed, however, we urge all Nevada interests to support the above legislation.

The following resolution was adopted in this connection:

Whereas a permanent means of adequate and practical financing of the livestock and ranching industry is essential; and

Whereas a committee of live-stock representatives from the various Western States, including Nevada, and appointed by the president American National Live Stock Association, in conference with Government officials, reviewed the entire situation at Washington, D. C., on August 25 and 26, 1922, and, with the Director United States War Finance Corporation, embodied their ideas on this subject in what is known as the Capper bill (S. 4063; H. R. 13033): Now, therefore, be it

Resolved by the stock growers and ranchers of Nevada, assembled at the fourth annual convention, Nevada Land and Live Stock Association, at Reno, this December 15-16, 1922, That they approve and indorse the above bill and urge its passage at the earliest practicable date as vital to the welfare of the ranching industry of the Nation.

F. B. STEWART, Paradise Valley,
W. F. DRESSLER, Minden,

E. R. MARVEL, Battle Mountain,
Committee.

RESOLUTIONS ADOPTED BY THE CALIFORNIA CATTLEMEN'S ASSOCIATION.

Whereas the authority of the War Finance Corporation to make new loans will expire on June 30, 1923; and

Whereas the preservation and development of the live-stock industry demands that before the War Finance Corporation ceases to function provision be made for the financing of the industry in a way that will enable it to obtain adequate capital for its legitimate needs at reasonable rates; and

Whereas the committee appointed by the President of the American National Live Stock Association, in accordance with the resolution adopted at the midyear meeting of the association in Denver on August 25 and 26, 1922, met recently in Washington, canvassed the whole situation, and with the cooperation and assistance of the managing director of the War Finance Corporation furnished a plan for live-stock financing which has been embodied in a bill introduced in the Senate by Senator Capper (S. No. 4063) and in the House by Representative McFadden (H. R. 13033); and

Whereas this bill contemplates the formation, under Federal law and under Federal supervision, of live-stock loan companies having a minimum capital of $250,000, such loan companies to be authorized to make advances against paper secured by chattel mortgages on breeding, stocker, or dairy herds and having a maturity of not to exceed three years; the formation of live-stock rediscount corporations having a minimum capital of $1,000,000 with which the loan companies may rediscount their paper; and the licensing by the Secretary of Agriculture of a force of competent and experienced men to inspect live-stock loans; and

Whereas the California Cattlemen's Association believes that if this bill is enacted into law the live-stock industry will be able to command an adequate supply of capital at more reasonable rates than heretofore have obtained: Now, therefore, be it

Resolved, That we, the California Cattlemen's Association, approve the bill and urge that it be passed without delay; and be it further

Resolved, That a copy of this resolution be sent to the President of the United States, the Secretary of the Treasury, the Secretary of Agriculture, and all the Members of Congress from the State of California.

RESOLUTIONS ADOPTED BY THE OREGON CATTLE AND HORSE RAISERS' ASSOCIATION.

Whereas the authority of the War Finance Corporation to make new loans will expire on June 30, 1923; and

Whereas the preservation and development of the live-stock industry demands that before the War Finance Corporation ceases to function provision be made for the financing of the industry in a way that will enable it to obtain adequate capital for its legitimate needs at reasonable rates; and

Whereas the committee appointed by the president of the American National Live Stock Association in accordance with the resolution adopted at the midyear meeting of the association in Denver on August 25 and 26, 1922, met recently in Washington, canvassed the whole situation, and, with the cooperation and assistance of the managing director of the War Finance Corporation, formulated a plan for live-stock financing which has been embodied in a bill introduced in the Senate by Senator Capper (S. 4063) and in the House by Representative McFadden (H. R. 13033); and

Whereas this bill contemplates the formation, under Federal law and under Federal supervision, of live-stock loan companies having a minimum capital of $250,000, such loan companies to be authorized to make advances against paper secured by chattel mortgages on breeding, stocker, or dairy herds, and having

a maturity of not to exceed three years; the formation of live-stock rediscount corporations having a minimum capital of $1,000,000, with which the loan companies may rediscount their paper; and the licensing by the Secretary of Agriculture of a force of competent and experienced men to inspect live-stock loans; and

Whereas the Cattle and Horse Raisers' Association of Oregon believes that if this bill is enacted into law the live-stock industry will be able to command an adequate supply of capital at more reasonable rates than heretofore have obtained: Now, therefore, be it

Resolved, That the Cattle and Horse Raisers' Association of Oregon approve the bill and urge that it be passed without delay; and be it further

Resolved, That a copy of this resolution be sent to the President of the United States, the Secretary of the Treasury, the Secretary of Agriculture, and all the Members of Congress from the State of Oregon.

STATE OF OREGON, county of Baker, 88:

I, S. O. Correll, secretary of the Cattle and Horse Raisers' Association of Oregon, hereby certify that the foregoing is a full, true, and correct copy of a resolution, and the whole thereof, unanimously adopted at a duly called meeting of the executive committee of the Cattle and Horse Raisers' Association of Oregon held on the 5th day of December, 1922.

S. O. CORRELL, Secretary.

RESOLUTION ADOPTED BY CALIFORNIA WOOL GROWERS' ASSOCIATION.

Whereas after July 1. 1923, there will not be in existence any agency or provision for the handling and discounting of long-time live-stock paper; and

Whereas the industry will be left without assurance of necessary service in future emergencies; and

Whereas the present banking laws do not permit the discounting by the Federal reserve system of paper drawn for a period in which a turnover can be made, thereby causing in effect a discrimination against live-stock paper: Now therefore be it

Resolved by the California Wool Growers' Association in convention assembled this 17th day of November, at Stockton, does favor and recommend that the national banking act should be so amended to permit the establishment of Federally chartered live-stock loan companies under the supervision of the Comptroller of Currency or the Federal reserve system, and the national banks, State banks, and private investors should be allowed to subscribe to the capital of such institutions; and

Resolved, That paper drawn for 12 months and secured by live stock or wool be made eligible for discount by the Federal reserve system.

W. P. WING, Secretary.

RESOLUTION ADOPTED BY THE ARIZONA CATTLE GROWERS' ASSOCIATION. Whereas the preservation and vital development of the live-stock industry of our country to-day depends upon proper financing provisions to be effected in a way that will enable adequate capital at reasonable rates; and

Whereas the committee appointed by the president of the National Live Stock Association in accordance with that association's resolution so adopted at the mid-year meeting of the association at Denver, Colo., on August 25 and 26, 1922, which met recently in Washington, canvassed the whole situation, and in cooperation of the managing director of the War Finance Corporation formulated a plan for live-stock financing which has been embodied in a bill introduced in the United States Senate by Senator Capper (S. 4063) and in the House by Representative McFadden (H. R. 13033); and

Whereas this bill contemplates the formation under Federal law and supervision of live-stock loan companies with minimum capital of $250,000. such loan companies to be authorized to make advances against paper having a maturity of not to exceed three years; the formation of live-stock rediscount corporations having a minimum capital of $1,000,000, with which the loan companies may so rediscount their paper; and the licensing by the Secretary of Agriculture of a force of competent and experienced inspectors to so inspect livestock loans; and

Whereas the executive committee of the Arizona Cattle Growers' Association believes that if this bill is enacted into law the live-stock industry will be able to command an adequate supply at more reasonable rates and have longer time periods than heretofore have been obtained: Now therefore be it Resolved, That the Arizona Cattle Growers' Association heartily approves the bill and urges that it be passed without delay; and be it further

Resolved, That a copy of this resolution be sent to the President of the United States, the Secretary of the Treasury, the Secretary of Agriculture, and all the Members of Congress from the State of Arizona. Attest:

ARIZONA CATTLE GROWERS' ASSOCIATION,
H. M. RICE, Secretary.

Mr. STRONG. I would like to ask you one question: Is not the second proposition set forth there practically a proposition taken from Mr. Appleby's bill?

Mr. MEYER. Yes. Part II contains a provision relating to the dividends on Federal reserve stock which is similar, I believe, to the bill introduced by Mr. Appleby. The provision was inserted by the Senate Committee on Banking and Currency.

Mr. STRONG. I mean that it is practically the same thing.

Mr. MEYER. I think it is, and I referred to the matter earlier in my statement. Mr. STRONG. Mr. Luce wishes to ask you some questions.

Mr. LUCE. Mr. Meyer, you and I have looked on the opposite sides of the shield with respect to some other matters, but on this occasion let me preface the questions that I wish to ask by saying that I find myself somewhat in sympathy with what you have said, but there are certain important features of the matter upon which you have not yet touched, upon which I think the committee might profit by your judgment. I observe on page 2 certain restrictions as to the manner in which these associations shall be organized, and then on page 7 there is a provision that they shall act as fiscal agents of the United States. There are other provisions of the same sort throughout the bill, and that raises a very important question, it seems to me. If I understand you rightly, you do not contemplate in this bill that any of the money of the Government shall be loaned to or advanced to those corporations. They are, in effect, what we call private corporations. That question reached the Supreme Court in the matter of the farm-loan banks, which decided that these banks were instrumentalities of the United States Government. This bill does not make clear that point, and, it seems to me, it is likely to invite important litigation. Do you construe this bill as contemplating that these corporations shall be instrumentalities of the United States Government?

Mr. MEYER. There is nothing in the bill, so far as I am aware, that makes them, directly or indirectly, instrumentalities of the United States Government in the sense that the Government will be liable for their obligations. They will be organized under Federal charter and will operate under the supervision of the Comptroller of the Currency, but the provisions with respect to these matters merely conform to the law governing national banks. They are instrumentalities of the United States Government only in the same sense that national banks are instrumentalities of the United States Government. Mr. Marr, our general counsel, and Mr. Henderson, our consulting counsel, are here, and they are better qualified to discuss legal questions than I am. The Governinent will not put any money into the credit corporations or the rediscount organizations and no tax-exempt securities are contemplated. You may remember that Mr. Bixby, when he appeared before the committee on behalf of the special committee representing the American National Live Stock Association, stated that the live-stock industry wanted to conduct its business on a business basis and that it was not here to seek Government money or tax exemption for securities. Mr. LUCE. It seems to me to be very important that the bill should clearly and definitely set forth that it is not contemplated that these corporations shall be instrumentalities of the Government.

Now, I call your attention to the provision on pages 21 and 23, as follows: That taxation by a State of the shares in corporations, organized or reorganized under the provisions of this act, dividends derived therefrom, or of the income of said corporations, shall be such only as is or may hereafter be authorized by law in the case of national-banking associations."

We are just now having a controversy in regard to our present law, and we are about to discuss that very question on the floor of the House.

Mr. STEAGALL. I observe the language in the bill to which Mr. Luce has called attention, and I suppose that the language used was designed to meet a particular situation that exists right now with reference to the taxation of the capital invested in national banks. However, I think that the simplest and best language that could be used would be to say that the taxation should be the same as that applied to capital invested in national banks.

Mr. STRONG. Mr. Luce had asked Mr. Meyer a question in regard to that. Mr. STEAGALL. I thought that what I said would be agreeable to Mr. Luce. Mr. MEYER. Our counsel, Mr. Marr, tells me that originally the language of the bill followed the language of the national banking act, but that it was changed to its present form by the Senate Committee on Banking and Currency. The final form of the paragraph is a matter for the committee to consider and determine.

Mr. LUCE. I am not merely raising the question of the form, but I am after the principle. I want to know how we can defend the proposal that the States shall not determine for themselves the matter of the taxation of these corporations.

Mr. MEYER. That would apply to national banks as well as to these corporations.

Mr. LUCE. The national banks are distinctly national institutions, and it does not seem to me that they are on all fours with these corporations. I want to find out what you had in mind in making this provision. For example, suppose a live-stock corporation is formed in the State of Colorado. Upon what ground could you defend the proposal to deprive the State of Colorado of the right to tax that live-stock association in Colorado in such manner as it may see fit?

Mr. MEYER. I think this bill is national in scope. We believe it is, or we would not suggest it as a proper field of national activity. We feel that these institutions will be just as national in their scope and purpose as the national banks are. They will be financial organizations exclusively and will not engage in live-stock raising or farming.

Mr. LUCE. But there were particular reasons for that sort of provision in the case of national banks. Are you aware of any particular, exceptional reasons why these associations should be taken out of the category of State banks in that respect?

Mr. MEYER. I believe that the same reason ought to prevail here as would prevail in the case of national banks.

Mr. LUCE. Will you briefly address yourself to this question: Why is it in principle necessary to create separate rediscount corporations, when our Federal reserve system has for its primary motive the providing of rediscount facilities? I have no hostility for the small bank, but I do not understand why we need two rediscount systems in the United States.

Mr. MEYER. These rediscount corporations will be able to take paper which is not eligible for rediscount in the Federal reserve system because of the length of time involved.

Mr. LUCE. What do you purpose by doing it in that way, instead of having the Federal reserve system also cover paper of longer time?

Mr. MEYER. We do not think the Federal reserve system should take paper having a longer maturity than nine months, and many people feel that even nine months is too long. The Joint Agricultural Inquiry Commission suggested that it should not go beyond six months.

Mr. LUCE. But if the Federal Reserve Board can not do it safely, how can a new corporation do it safely?

Mr. MEYER. Because they do not issue currency against their paper as the Federal reserve banks do. They will have to find a market for their paper out of investment funds. Of course, you realize that the Federal reserve system is supposed to take only liquid paper, and that there is a considerable volume of live stock and other agricultural paper which would not ordinarily come within that classification. The rediscount corporations are authorized to take paper having a maturity up to three years; they may also take commodity paper with a maturity not exceeding nine months. They will especially furnish a market for paper of the longer maturities outside of the district in which it is created. The Federal reserve bank in New York does business with New York banks; the Federal reserve bank in Boston does business with Boston and other New England banks. A rediscount corporation might be formed in New York, with capital subscribed from Boston, New York, Philadelphia, and other nearby cities, which would rediscount paper from, say, loan companies and banks in Arizona, Nevada, and New Mexico. The Federal reserve banks in