88 DEPARTMENT OF AGRICULTURE

Is it the intention of the Agricultural Credits Act of 1923
 that credit accommodation should be provided by new
 local agencies rather than by existing banks or other
 institutions?

 The evident intent of the law is that existing credit
machinery shall be used as far as possible. It is desirable or
advisable to form new credit agencies only where the pres-
ent ones are inadequate or do not take advantage of the
new discount facilities. Improvement of existing credit
agencies, rather than their destruction, is the object of the
law.

Are these intermediate credit banks now in operation?

 Yes. They were chartered and organized shortly after
the enactment of the law, and have been in operation
several months.

On what products stored and controlled by cooperative
 marketing associations may direct advances be obtained
 from these new banks?

 The Federal Farm Loan Board has already approved
the following commodities, when properly stored, as secur-
ity for loans. Gram, cotton, wool, tobacco, peanuts, broom
corn, beans (including soy beans), rice alfalfa and red top
clover seeds, hay, nuts, dried prunes, dried raisms, and
canned fruits and vegetables. Other commodities will be
added to the list when the board has determined whether
or not in its opinion they can be stored so that warehouse
receipts based on them will be good collateral.

Is the service of the new banks to be measured solely by
 the discounts and advances actually extended?
 No. They are also valuable in that credit made available
by them encourages private financial institutions to extend
loans. Farmers' cooperative associations have often found
commercial banks willing to give credit on very reasonable