Show national topics interpreted by william bruckart washington the president lately has been stressing the necessity of 0 providing credit more credit loans of money to demanded those who want to do business but who the resources after tour four years of the depression to get going again jesse jones chairman 0 of the reconstruction st finance corporation has made several speeches urging that the banks make loans freely to the butcher the baker and the candlestick maker from elsewhere in the government there Is the cry that more credit ii hall be provided credit here credit there and credit otherwise all 0 of which has moved observers here to inquire whither boest thou uncle sam students of finance and economics who are regarded as knowing their oats tell me that there must be liberal use of credit at any time in this country it seems to be the system we have built up now more than ever I 1 am told Is there a necessity for liberal terms to borrowers they predicate their views on that which is the fact namely that in every community there are businesses that would like to get going again on something like a normal basis if they had bad the resources these resources however have been depleted by four extremely difficult years and consequently the business men have hale to proceed slowly cut but the continued shouting that there must be credit has more to it than just the fact that money ought to be loaned the economists admit frankly that other factors must be considered in the first instance when the banker of your community makes a loan he loans your money that has neon neen entrusted to his big care in the form of deposits in his bank in the second place the business man who borrows Is taking a risk for he has to put up collateral security with his big note to the bank and needless to say that collateral rol lateral Is always sufficient to insure the bank against loss so it if the borrower falls to make a profit on the money he borrows or it he makes a bid bad guess on the investment of that money and loses he not only loses lose the amount borrowed but his collateral as well so even if he has the re sources to put up the required collateral be Is going to think twice before he borrows summed up therefore the question of 0 private credit or private loans on liberal terms Is not limited to the banks by any means in other words aou ou can lead a horse to water but you cant make him drink in this case sometimes there Is no horse to lead to water and sometimes there Is no water when the horse gets there 0 0 a but let us turn to a consideration of government credit the government Is putting out money in a dozen different ways and it Is using the semi gov agency the federal reserve system to put out other money yet the same factors are influencing that situation as those that are at in the field of private finance when the federal reserve system was created during the administration of president wilson one of the dreams of its sponsors was that it would make credit easy that it would provide money when nhen business needed it this has been found to be true ranks banks that 11 are re members of the federal reserve system liae the privilege of discounting notes they have taken from their business house customers with the federal reserve banks what they do actually Is sell that note to the reserve bank and get ca cash sh for it but they agree to take it up in a specified time it Is almost like borrowing from a local bank except that the transaction Is between two banks instead of between an individual or a corporation and the local hank bank 0 a the f federal reserve banks are operating now on what Is known as an easy money policy easy money they ai ate e loaning policy money wy to the member banks on discounts at avery ahery low rate of interest in addition the reserve banks are engaged in open market operations under which they are buying united states bonds gonds and treasury notes at the rates of about fifty million dollars worth a week the theory of this Is that the reserve banks having an elastic stock of money will put out cash every time they buy one of those government bonds which are acquired wherever ville rever they can bo be bought that his has put out cash but from what the financiers tell me the release of that currency has not resulted in banks loaning additional funds to their customers for the reasons outlined above since there has been no swarm of borrowers at the bank windows the cash that has bag been put out by the reserve banks simply has found its way back into the banks as deposits what then the banks have taken that cash to pay ot off whatever debts they have at the reserve banks and have taken their cast customers omers notes back to hold them until they mature which Is perfectly natural because the bunks banks ran can earn a profit only from the interest they receive on loans and if the customer paid 6 per cent and the bank discounted that note with a re serite bank it would have to pay a part of that 6 per cent as interest in crest ferest on its bor from tile the reserve banks hence with the note baa back in its possession the bank gets all of 0 the later interest now as ag to the loans that are being made by the reconstruction finance corporation the department of agriculture the farm credit administration tion the federal home owners loan corporation and whatever other agency there may be it Is the same old story none of them can loan unless the security la Is ample that Is a farmer cannot borrow unless he has a farm which he can mortgage or a growing crop or some work stock and the city man cannot borrow unless he has a house which he can mortgage it if it were not that way the government would be putting out money without a chance of getting repaid unless the borrower wanted to do it it takes no fortune teller or soothsayer to foresee where that would lead and what it would amount to in the end it would simply be taking money paid into the federal treasury by taxpayers and virtually giving it away obviously soon the taxpayers would quit paying it in and having mentioned the taxpayers I 1 gather from conversations with unbiased observers here that the taxpayers are due for a tremendous shock anyway before this recovery plan Is completed the expenditures are so vast and in so many ways that it Is difficult if not impossible to tell how much the thing Is costing of course as I 1 see it if recovery takes place and there is prosperity abroad in the land nobody is going to object so muth much on the other hand band it if the methods em plowed by the roosevelt administration tall fail to bring complete recovery and the country has to worry along for awhile in the same condition it now Is then it appears quite obvious that the taxpayers are going to raise enough cane to rout some of the public officials out of their jobs 0 0 secretary wallaces plan to buy up about six million pigs weighing less than pounds and wallace ilanone plan one million sows bows about to farrow as half success a means of down the hog bog surplus and forcing prices higher appears to have been only about halt half successful or to say it another way the program failed department experts wont say why it failed but there has been a good deal of discussion in the capital that the secre plan missed fire because it did not take into consideration the practical the human side of the equation it was a beautiful theory I 1 think the secretary ought not to be charged wholly with it however because it had bad its inception in the minds of certain men who claim to be leaders in agricultural thought who put their heads together with some of the professors who are so numerous around washington of course the program became the wallace plan as soon as he approved it it from divers sources I 1 get the information that farmers in many sections of the country held off marketing their pigs and their sows bows even with the premium the department of agriculture was paying because they wanted to wait for those higher prices that the department of agriculture said would come quito quite obviously they expected the little pigs to grow up and when they became bigger pigs and prices were higher there would be bigger amounts of money the net result of the whole show was that the department of agriculture put out only about in its pig program whereas it had estimated that there would be approximately expended A part of the total paid out went to the processors such as the meat pickers packers and butchers as compensation for the work they did the count rys hog population was reduced by the extent of about four million pigs while instead of one million sows bows I 1 being bought and killed there were not more than one hundred thousand 0 a 0 notwithstanding the fallu failure re of the program to buy pigs and BOWS the outlook for hog sup expect lower plies in the principal markets during the shipments forthcoming marketing year is tor for lower shipments than in several years the marketing year ending october 1 1933 saw roughly head of hogs slaughtered that total and it Is fairly accurate because federal inspectors see all of the hogs killed was the largest in four years hut but the marketing year just now starting gives every indication of a considerably smaller shipment and slaughter and that probably according to the in means eang higher prices experts the relationship between hog prices and corn P prices rices has been unfavorable production in the last three for hog months and the prediction from the department of agriculture Is that this condition will continue for probably a year it la Is to be assumed that ebli will result in a smaller pig crop this fall than Is usual although since tile the plin plan to buy pigs failed to materialize into satisfactory results I 1 do not see liow how the experts can guess the dimen of the pig crop ca 1933 western union |