Full text of Agricultural News Letter : Volume II, Number 4

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AGRICULTURAL
N E W S LETTER
THE

Vol. II

FEDERAL

RESERVE

BANK

Dallas, Texas, April 15, 1947

RECOMMENDATIONS FOR THE
IMPROVEMENT OF FARM CREDIT
Looking ahead to the time when credit
agencies may be called on to furnish a greatly
expanded volume of farm credit and when
farmers may be in a less favorable financial
position than at present, leading bankers and
other credit authorities are giving thought to
improving and strengthening farm credit
facilities. In meeting the problems that will
arise, it is believed that bankers and farmers
can work together as partners in reaching a
mutually helpful solution. In a recently re­
leased statement, Dr. D. Gale Johnson of the
University of Chicago’s Department of Eco­
nomics stressed the need for a liberalization
of credit terms to farmers. He suggested that
credit institutions consider lengthening re­
payment periods, so that loans for purposes
of establishing livestock enterprises or per­
manent pastures, constructing fences or build­
ings, or purchasing equipment might be amor­
tized over periods of two, three, or five years.
Such revision in lending policies would bring
farm credit more in line with the type of
financial aid extended to manufacturers or
other businessmen and would encourage
farmers to invest greater amounts of capital
in their farms. The larger capital investment
in new machinery and buildings and in soil
improvement would result in increased farm
efficiency and per capita income.
Dr. Johnson also suggested that credit in­
stitutions give serious consideration to the
establishment of flexible arrangements regard­
ing principal and interest payments which
could be varied according to the degree of
prosperity attending annual farm operations.
He emphasized that returns from farming

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DALLAS

Number 4

fluctuate widely from year to year, depending
on both yields and prices. Thus many farmers
with varying yearly incomes, if held to rigid
annual mortgage instalments and interest pay­
ments, may be driven into financial difficulties
and possible foreclosure by forces beyond
their control. A sound flexible repayment
plan would keep such operators in business
and aid in preventing foreclosures, which
often result in losses to the lending institu­
tions as well as to the farmer.
In order to improve farm credit facilities,
however, and thus forestall revival of the
criticism that banks do not provide an ade­
quate and dependable supply of credit to
farmers at a reasonable cost and on terms
tailored to the needs of agriculture, banks
need to fortify themselves with a practical
understanding of agricultural conditions and
with adequate files of information on their
present and prospective borrowers. An under­
standing of agricultural conditions implies
not only knowledge of recent and prospec­
tive developments in agriculture generally but
also comprehension of the impact of these
developments on the individual farmer and
his farm; for it is the effect of these develop­
ments which will often determine the profit­
ableness of a farm enterprise and the sound­
ness of any loan advanced to a farm operator.
Moreover, this thorough understanding of
agricultural conditions will aid lending agen­
cies in formulating credit policies adapted to
the needs of farmer customers and at the same
time consistent with their own interest.
As indicated above, adequate credit files for
each borrower are a necessary supplement to
the general knowledge of the lender about
agriculture, for the information assembled in
such files is a primary requisite to the success­

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AGRICULTURAL NEWS LETTER

ful operation of a farm-loan program. The
importance of credit files was recently empha­
sized by Mr. C. T. O ’Neil of the National
Bank and Trust Company, Charlottesville,
Virginia, and Mr. Gordon C. Hunter of the
Peoples Bank of Roxboro, North Carolina—
both members of the Agricultural Commis­
sion of the American Bankers Association.
Mr. Hunter listed the following requirements
for an adequate credit file:
1. A statement as to farmer’s character,
for he “ must have a good character and wil­
lingness to pay his obligations.”
2. A statement regarding the productivity
of the land, for if his land will not produce
without heavy fertilization, his production
costs will be high and his loan may become a
liability.
3. Production records which reflect the
operator’s farming ability.
4. A
number
planted
number

complete farm plan showing the
of acres in cultivation with the crops
annually on each acre as well as the
and type of livestock.

5. A clear description of the legal title of
the farm.
6. A financial statement which will reveal
the existence of debts, if any, and the net
worth of the borrower.
Such information as this in the credit file
would be helpful to the bank in determining
whether the borrower is a good and depend­
able operator with a good farm and equip­
ment and a sound long-range operating pro­
gram. Mr. O ’Neil stressed, however, that
information for the credit file cannot be satis­
factorily obtained without visiting the farm
and seeing for oneself the condition of the
equipment, livestock, and land.
“ This means,” Mr. O ’Neil points out to
his fellow bankers, “ that there must be some­
one in your bank who knows farming and
has time to go out and see the farmer on his
farm. Many bankers today are gradually

building credit files on all farmers in their
trade area, with the idea that they will be in
a position to act promptly on any application
for credit within their territory. . . . If you
are planning to carry on an agricultural credit
business from your desk in the bank, my ad­
vice to you is to let the other fellow do it.”
Mr. Hunter suggests also that country
bankers need to work in closer cooperation
with county agents, vocational agricultural
teachers, and other agricultural workers in
their communities in order to increase farm
production and efficiency through long-range
planning and financing. In concluding his
statement, he says: “ If we are careful to serve
the competent farmer, and to work with the
county agents now when all farm loans look
good, we will be ready to ride out the squalls
which may come later.”
Bankers generally have expressed an inter­
est in the development of improved farm
credit facilities to provide better and more
adequate service to their farm clients, for it
is realized that steps taken in this direction
now will benefit farmers and businessmen in
rural sections whose welfare is closely linked
with agriculture and will also strengthen the
position of banks in farming areas.

FARM MANAGEMENT
Sheep Improvement
Results of sheep-breeding experiments at
the New Mexico A. & M. College show that
breeding for wool length alone increased the
economic value of the flock much more than
did breeding for all economically important
characters, such as open face and smooth body
as well as length of wool, according to P. E.
Neale, associate animal husbandman of the
Agricultural Experiment Station. Under this
single-character breeding system, the average
length of wool for the herd increased 0.74
inch from 1943 to 1946, or four times as
much as under the all-character breeding sys­
tem in the same length of time. The singlecharacter breeding system is reported as an
important factor in producing at New Mexico

AGRICULTURAL NEWS LETTER
A. & M. College the fleece that won the re­
serve championship this year in the National
Western Livestock Show at Denver.

African Cattle Louse Reported in Texas
The African cattle louse has been discovered
in south Texas and has made its appearance
as far north as Duval County. The louse,
which previously had been found only in
West Africa, was discovered for the first time
in the United States in 1945, when entomolo­
gists of the Bureau of Entomology and Plant
Quarantine detected its presence on Florida
cattle. Infestations of this parasite are said to
sap cattle quickly of their vitality and to
cause some to become too feeble to walk.
Because the lice infest the brush of the tail
of cattle, they are commonly referred to as
"tail lice.” Eggs are glued to the long hairs
of the tail, and when cattle are heavily in­
fested, the tail has a matted appearance. The
United States Department of Agriculture re­
ports that sprays containing 1.5 per cent
D D T wettable powder will free cattle of the
parasite. It is recommended that the affected
animal be sprayed thoroughly with one and
one-half to two pints of the solution and that
the treatment be repeated as necessary.

Payment of Cotton Loss Claims Stopped
Secretary of Agriculture Clinton P. Ander­
son last month ordered a halt in paying out
indemnities for losses on the 1946 cotton crop.
Mr. Anderson stated that funds available for
that part of the general crop insurance pro­
gram had been exhausted due to loss claims
"far beyond any preliminary estimate.”
The Crop Insurance Corporation is con­
tinuing to accept, process, and adjust claims
on the 1946 cotton crop, but the Agriculture
Department has promised "a thorough in­
vestigation of the whole question of cotton
loss claims, particularly in the areas of heavi­
est reported losses.” If the investigation fails
to reveal any evidences of fraud, the remain­

3

ing claims will be paid from a deficiency ap­
propriation, according to Mr. Clifford R.
Hope, Chairman of the House Agriculture
Committee.
Texas last year had 37,077 cotton crop
contracts in force covering 49,084 farms, or
almost three times as many as the next highest
state— Alabama. Payments under these cotton
crop contracts constituted the major part of
the $24 million in indemnities paid during
1946 under the general crop insurance pro­
gram in Texas. Against these disbursements
of $24 million, $9.6 million in premiums had
been paid in by the insured farm operators.

TECHNOLOGICAL DEVELOPMENTS
Treatment for Removing Roundworms
From Hogs
Sodium fluoride has proved effective in
eliminating intestinal roundworms from hogs,
according to an announcement of the Agri­
cultural Extension Division of Louisiana State
University. If properly administered, only
one treatment is necessary for each infesta­
tion. For use, the chemical is mixed with feed
in the proportion of one part of sodium fluo­
ride to 99 parts of feed, and as an overdose
may cause death to hogs, the mixture should
be thoroughly blended so that no hog will get
too much of the chemical. Details of the use
of this preparation may be secured from the
Agricultural Extension Division, Louisiana
State University, Baton Rouge, Louisiana.
Eradication of Earticks from Livestock
The spinose eartick, which has been a seri­
ous pest of livestock in the Southwest, can
now be eradicated by use of a newly devel­
oped chemical preparation, according to Joe
V. Whiteman, assistant animal husbandman
of the New Mexico Extension Service. This
new preparation, known as Stock 1029, is
said to be effective on cattle, horses, and sheep.
It kills not only ticks already in the ears at
the time of the application but also those
which move in during the next few months.

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AGRICULTURAL NEWS LETTER

Many chemical companies are now selling
.Stock 1029, and directions for its use are
found on containers.
In discussing this treatment, Mr. Whiteman says that the ground areas around salt
and feed troughs where the ticks mate and
lay eggs should be sprayed with a preparation
containing one-half kerosene and one-half
crankcase oil. To be fully effective, the treat­
ments should be repeated periodically, as
needed.
Treatment of Rice Seed
Results of four-year tests of the effective­
ness of a new fungicide, Arasan, in treating
rice seed show that, when applied at the rate
of 1 /z ounces per bushel, this preparation may
increase the rice stand as much as 25 per cent
for March and April plantings and 10 per
cent for May plantings. These findings are
reported by Drs. S, J. P. Chilton and T. C.
Ryker of the Louisiana Experiment Station in
a new experiment station bulletin, No. 412,
entitled Seed Treatment of Rice.
Besides improving stands, the treatment
appears also to increase yields. In the experi­
ments reported in the bulletin, increases in
yields averaged about three-tenths of a barrel
per acre. While numerically small, these yield
increases were large in relation to the cost of
treatment, which, according to the authors of
the bulletin, probably did not exceed 2 5 or 30
cents per acre.
Control of Soil Rot of Sweet Potatoes
It has been found that soil rot occurs in
sweet potatoes only in soils having an acidity
rating (pH ) above 5.2, according to studies
conducted by the Louisiana Experiment Sta­
tion. The organism causing the rot does not
grow in soils with a lower degree of acidity.
In order to reduce the acidity of soil so that
this organism cannot survive, one may apply
sulphur at the rate of 500 to 800 pounds per
acre. Such treatment not only eliminates soil
rot but also increases yields on treated soils, in
some cases from 120 to 160 crates per acre,
over untreated soil.

ANNOUNCEMENTS
Recent Publications
Louisiana Agricultural Experiment Station,
Louisiana State University, Baton Rouge:
Seed Treatment of Rice, Bulletin No. 412,
by S. J. P. Chilton and T. C. Ryker.
Oklahoma Agricultural Experiment Station,
Oklahoma Agricultural and Mechanical
College, Stillwater:
Strawberry Culture and Varieties, Bulletin
B-304, by G. F. Gray.
Fertilizer Recommendations for Oklahoma
Crops, Bulletin B-305, by H. J. Harper and
others.
Texas Agricultural Experiment Station, Texas
Agricultural and Mechanical College, C o l­
lege Station:
Cotton Variety Test, Main Station Farm ,
1942-1946, Progress Report 1058, by J . E.
Roberts and D. T. Killough.
Potato Varieties for the West Cross T im ­
bers, Progress Report 1059, by Tom E. D en­
man.
Cotton Variety Test at Brazos River Field
Laboratory, 1943-46, Progress Report 1060,
by J. E. Roberts and D. T. Killough.
Protein and Mineral Content of Forages at
the Amarillo Conservation Experiment Sta­
tion, Progress Report 1061, by C. J. Whitfield
and others.
Mechanical Harvesting of Corn, Progress
Report 1063, by H. P. Smith and J. W. Sor­
enson.
New Varieties of Sorghum, Progress R e­
port 1064, by R. E. Karper and J. R. Quinby.
No Run-Off and No Erosion for 20 Years,
Progress Report 1065, by R. E. Dickson and
others.
Comparison of Different Methods of H ar­
vesting Cotton, Bulletin No. 683, by H . P.
Smith and others.
Peanut Meal and Cottonseed Meal as Pro­
tein Supplements in Rations for Fattening
Yearling Steers, Bulletin No. 68 5, by J. H .
Jones and others.
Copies of these bulletins may be secured
by request to their respective publishers.