Farm Credit System

(noun)

A federally chartered network of cooperatives and related service organizations that lends to agricultural producers, rural homeowners, farm-related businesses, and agricultural, aquatic, and public utility cooperatives in the United States.

Related Terms

Examples of Farm Credit System in the following topics:

  • The Granger Movement

    • Grange agents bought everything from farm machinery to women's dresses, and purchased hundreds of grain elevators, cotton and tobacco warehouses, and even steamboat lines.
    • They purchased patents so that the Grange might manufacture its own farm machinery.
    • With Southern Masons as guides, he toured the war-torn countryside in the South and was appalled by the outdated farming practices.
    • The birth of the Cooperative Extension Service, Rural Free Delivery, and the Farm Credit System were largely due to Grange lobbying.
    • Small, ceremonial farm tools are often displayed at Grange meetings.

  • Agriculture, Tenancy, and the Environment

    • The landowner provided land, housing, tools, and seed (and perhaps a mule), and a local merchant provided food and supplies on credit.
    • The system started with blacks when large plantations were subdivided.
    • Other solutions included the crop-lien system (in which the farmer was extended credit for seed and other supplies by the merchant), the rent-labor system (in which former slaves rented land but kept the entire crop), and the wage system (in which the worker earned a fixed wage, but kept none of his crop).
    • This system was distinct from the sharecropper.
    • The landowner would extend to the farmer shelter, food, and necessary items on credit to be repaid out of the tenant's share of the crop.

  • Early New England Society

    • Early New England Puritan society was characterized by yeoman farming communities and a growing merchant class.
    • Some farmers obtained land grants to create farms in undeveloped areas.
    • The gold coins and credit slips were sent to England where they were exchanged for manufactures, which were then shipped back to the colonies and sold, along with the sugar and rum, to farmers.
    • This system of exchange became known as the "Triangular Trade."
    • Most importantly, colonial legislatures set up a legal system that proved conducive to business enterprise by resolving disputes, enforcing contracts, and protecting property rights.

  • Government During the War

    • Following the secession of the Southern states, the absence of Southern Democrats in Congress allowed the Republican Congress in Washington to enact legislation that reshaped the nation's financial, tax, land, and higher-education systems.
    • Prior to secession, the South had resisted policies that would hurt the plantation economy, including tariffs to promote industry and land grants for family farms.
    • The latter established a system of national banks in 1863, and promoted development of a national currency backed by bank holdings of U.S.
    • Railroads were also encouraged to sell tracts for family farms at low prices with extended credit.
    • The 1862 Homestead Act opened up public-domain lands for family farms at no cost.

  • Devastation in the South

    • Farms were in disrepair, and the prewar stock of horses, mules, and cattle was much depleted, with two-fifths of the South's livestock killed.
    • The South's farms were not highly mechanized, but the value of farm implements and machinery in the 1860 Census was $81 million and was reduced by 40 percent by 1870.
    • Restoring the infrastructure—especially the railroad system—became a high priority for Reconstruction state governments.
    • The landowner provided land, housing, tools, and seed (and perhaps a mule), and a local merchant provided food and supplies on credit.
    • The South was thus transformed from a prosperous minority of landed gentry slaveholders into a tenant farming agriculture system.

  • Commerce in the New England Colonies

    • The earliest of the New England Colonies were usually fishing villages or farming communities in the more fertile land along the rivers.
    • At the same time, a variety of artisans, shopkeepers, and merchants provided services to the growing farming population.
    • There they built and repaired goods needed by farm families.
    • The gold and credit slips were sent to England, where they were exchanged for manufactures, which were then shipped back to the colonies and sold, along with the sugar and rum, to farmers.
    • This system of exchange was known as the Triangular Trade .

  • The Panic of 1819

    • In an effort to bring stability to the nation’s banking system, Congress chartered the Second Bank of the United States (a revival of Alexander Hamilton’s national bank) in 1816.
    • However, because the drastic fall in agricultural prices had greatly reduced the value of land, the banks were left with farms they were unable to sell.
    • The money they received in return was credited toward their debt.
    • The act also extended the credit period to eight years.
    • Americans made the best of the opportunities presented in business, in farming, or on the frontier, and by 1823 the Panic of 1819 had ended.

  • The Right to Vote

    • Relative to other societies of the time, many could vote because most property was held as family farms.
    • His system was opposed by the Marquis de Condorcet, who proposed instead the method of pairwise comparison that he had devised.
    • While Condorcet and Borda are usually credited as the founders of voting theory, recent research has shown that the philosopher Ramon Llull discovered both the Borda count and a pairwise method that satisfied the Condorcet criterion in the 13th century.
    • Some of the apportionment methods discovered in the United States were in a sense rediscovered in Europe in the 19th century, where they had served as seat allocation methods for the newly proposed system of party-list proportional representation.
    • The Single transferable vote system was devised by Carl Andrae in Denmark in 1855, and also in England by Thomas Hare in 1857.

  • The Colonial Elite

    • Many New Englanders took part in a sophisticated system of trade in which they exported products to the West Indies, where they were traded for molasses, sugar, gold coins, and bills of exchange (credit slips).
    • The gold and credit slips were sent to England where they were exchanged for manufactures, which were shipped back to the colonies and sold along with the sugar and rum to farmers.
    • Unlike the life of yeoman farm households, these merchants lived lives that resembled those of the upper classes in England.
    • Large-scale farmers and merchants became wealthy, while farmers with smaller farms and artisans only made enough for subsistence.

  • Promoting Economic Development

    • The United States had been unable to pay its debts in the 1780s and was therefore considered a credit risk by European countries.
    • The reports addressed public credit, banking, and raising revenue and encouraged the development of an elaborate system of duties, tariffs, and excises.
    • In the 1790s, Hamilton and the Federalist Party extolled innovation in manufacturing (demonstrated by the development of the "American System") as the supreme virtues of American republicanism.
    • The system allowed industrialists to greatly reduce costs.
    • As opposed to his Democratic-Republican contemporaries who espoused agriculture and farming as the backbone of the American economy, Hamilton believed that overall commercial development would foster the republican virtues of self-reliance and autonomy, as well as American independence in the world economic system.