The Future of the Great Plains: Report of the Great Plains Committee

The Future of the Great Plains: Report of the Great Plains Committee

The Future of the Great Plains: Report of the Great Plains Committee

The Future of the Great Plains: Report of the Great Plains Committee

Excerpt

The primary purpose of any readjustment of the financial situation in the Great Plains area should be progressive reduction, and elimination at the earliest practicable moment, of the necessity for grants and subsidies; substitution therefor of needed capital loans on a sound credit basis; and establishment of a sound credit basis--which means one which is safe for the borrower as well as for the lender--by bringing land use into conformity with the requirements imposed by fundamental climatic and other physical factors, and by market conditions. Financial reorganization along these lines is as much sound Regional policy as sound National policy; and it is gratifying to be able to report that this is the point of view held by the many leaders in the area whose judgments have been expressed to the Committee at hearings and otherwise.

The problem is essentially one of investment of capital for the purpose of effecting reorganization of land uses and of farm practices in such manner as to increase the income-earning capacity of agriculture in the Great Plains Region. The interest and principal of loans must be repaid out of earnings, and therefore earning capacity determines their soundness. In the recent past, three major factors have affected the soundness of loans and investments in the Great Plains area: (1) the decline of the general price level of agricultural commodities; (2) the great variability in crop yields; and (3) the fictitious values attributed to much of the land during periods of intense speculation. The first of these factors is a national agricultural problem outside the field of this report. The second is a factor reflecting natural conditions outside the control of man; but these are conditions to which man can make adjustments that will affect favorably the quantity and flow of agricultural income. The third factor is definitely although not easily within the control of man, and should be managed accordingly.

Such adjustment of the financial situation places on the. States concerned, and on individual citizens, a heavy responsibility for effective cooperative action of the nature indicated in the Committee's Report. The Federal Government is the only agency able to mobilize capital when its procurement through ordinary private channels is prevented by depressed economic conditions, and to take action looking towards stabilization of the price level and elimination of speculative prices; but whatever it may do will not have complete effect in establishing sound credit conditions unless the States, through indicated legislative and administrative action, and individuals, through the will to improve their operations, create locally those conditions of land use and farming practices that both conserve the soil assets and procure a stable income from their use.

THE NEED OF CAPITAL

It is obvious that any thorough-going program of readjustment and development, such as has been outlined in the Committee's Report, will require considerable new capital. Reorgani-

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