ONE of the most significant and gratifying gains in the livestock
business during the decade just past is the recognition of its
financial soundness. This is reflected in the changed attitude of
financiers and investors towards cattle paper. While a decade ago
bankers in the great financial centers looked with suspicion upon
such securities, now bankers and business men throughout the country
purchase approximately $500,000,000 of cattle paper annually and regard
it as among the safest investments.
Melvin A. Traylor, President of the First Trust and Savings Bank
of Chicago, declares that “loans on livestock are the best of all
investments,” and President Thos. P. Martin, of the Oklahoma Stock
Yards Bank, Oklahoma City, agrees with him. This latter bank loaned
$45,000,000 in seven years to cattle producers in Oklahoma, Texas and
New Mexico, only fifty dollars of the amount loaned being lost. It is
doubtful if any other industrial securities could make a better or even
an equal showing.
There is still some difficulty in arranging loans in some sections of
the country, where bankers have not yet realized the changed conditions
of the business and farmers have not given the proper emphasis to the
improvement of livestock production. But generally speaking the cattle
feeder with good judgment in the breeding and selection of feeders
meets with no obstacles in financing his operations.
Most country bankers freely accept cattle paper because it is readily
rediscounted in the country’s financial centers. But many of them urge
the borrowing feeders to keep accounts and determine accurately their
profits and losses.
This is to the interest of the feeder and the cattle industry as a
whole. For if the business is ever to be placed on a cost-of-production
basis for the reckoning of market prices, it must be done by an
accumulation of thousands of actual tests in feeding practice. It
is plain that each individual feeder could not set or ask a certain
percentage of profit, since a poor judge of stock and a careless feeder
would demand more for an inferior product than the more efficient
feeder would ask for a better article.
The feasibility of any such scheme of regulating prices does not now
appear, but it is clear in any case that each lot of cattle would have
to be appraised at what their production _ought_ to cost, considering
quality, and not what it actually _did_ cost.
[Illustration: Bankers now recognize cattle loans as good investments,
and the skilled stockman has access to needed funds.]