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tainties; and to provide positive assistance in carrying on vitally essential highway work, I requested each of the Government departments and administrations interested to name a representative to serve on a council to deal with highway projects during the period of the war. As a result, the United States Highways Council, consisting of a representative from the Department of Agriculture, the War Department, the Railroad Administration, the War Industries Board, and the Fuel Administration, was formed in June. During the first four months of its existence, the council passed upon about 5,000 applications, involving nearly 4,000,000 barrels of cement, 3,250,000 tons of stone, 1,140,000 tons of gravel, 1,207,000 tons of sand, over 77,000,000 brick, and nearly 20,000,000 pounds of steel, and 140,000,000 gallons of bituminous materials.

FOREST FIRES.

Protection of the forests against disastrous fires proved an exceptionally difficult task. An unusual strain was imposed on an organization somewhat depleted in numbers and much weakened by the loss of many of its most experienced men. Added to this was the difficulty of securing good men for temporary appointment as guards during the fire season and bodies of men for fighting large fires. An unusually early and severe dry season caused the outbreak of serious fires before the summer protective organization was fully ready for them. Some embarrassment in meeting the situation was caused by the failure of the annual appropriation act to pass Congress until after the fire season was virtually over. Ordinarily, expenditures during the summer months are greater than those for the remainder of the fiscal year. Therefore, the sums available under the continuing appropriation of one-sixth of the annual appropriation for the preceding year to cover the months of July and August were insufficient to meet the situation. Relief was furnished by the President, who placed $1,000,000 at my disposal as a loan from his emergency fund. It may be necessary to seek from Congress again a deficiency appropriation of $750,000.

The greater part of the extra outlay for fire fighting was on a relatively small number of forests in the Northwest which present conditions of great difficulty. These forests for the most part are rugged, unbroken wilderness. While the Forest Service for years has been attempting to develop a system of communications in the

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form of trails, telephone lines, and roads to facilitate the early discovery of fires and quick action to extinguish them, the funds available for construction work have been too limited to permit of rapid progress. There is no resident population at hand to draw upon for fire fighters, so that when large fires develop forces must be organized in towns and cities scores if not hundreds of miles away, transported by railroad to the points nearest the fire, sent long distances into the woods, and there provided with equipment, and food by pack trains. The inevitable result of such conditions is that fires which in other regions would be quickly put out, gain headway, burning, perhaps, for several days before the effort to bring them under control can begin. There should be provision for pushing more rapidly the improvement work on these forests, for a greater number of forest guards, and for the earlier organization of the protective system each fire season. For these purposes, the estimates submitted to Congress include increases for specific forests totaling $230,808.

WATER POWER.

In my report of last year I emphasized the need of water-power legislation and, since three departments would be directly involved. suggested that it contain a provision for an administrative commission composed of the Secretaries of War, the Interior, and Agriculture. After prolonged consideration by a special water-power committee, a measure was drafted and was passed by the House of Representatives. Its early enactment into law would remove many uncertainties in the water-power situation and would directly conduce to the public interest.

RECENT LEGISLATION AND DEVELOPMENT.

The last five years have been especially fruitful of legislation and of its practical application for the betterment of agriculture. Special provision was made for the solution of problems in behalf of agriculture, embracing marketing and rural finance. The Bureau of Markets, unique of its kind and excelling in range of activities and in financial support any other similar existing organization, was created and is rendering effective service in a great number of directions. Standards for staple agricultural products were provided for and have been announced and applied under the terms. of the cotton futures and grain standards acts. Authority to license

bonded warehouses which handle certain agricultural products was given to the Department, and the indications are that, with the return of normal conditions the operation of the act will result in the better storing of farm products, the stabilization of marketing processes, and the issuance of more easily negotiable warehouse receipts. The agricultural extension machinery, the greatest educational system ever devised for men and women engaged in their daily tasks, had very large and striking development. The Federal aid road act, approved shortly before this country entered the war, resulted in legislation for more satisfactory central highway agencies in many States and the systematic planning of road systems throughout the Union. To-day each State has a highway authority, with the requisite power and with adequate funds to meet the requirements of the Federal measure. The Federal reserve act, which has benefited every citizen through its influence on banking throughout the Union, included provisions especially designed to assist the farming population. It authorized national banks to lend money on farm mortgages and recognized the peculiar needs of the farmer by giving his paper a maturity period of six months. This was followed by the Federal farm loan act, which created a banking system reaching intimately into the rural districts and operating on terms suited to the farm owners' needs. This system began operations under the troubled conditions of the world war, and its activities were impeded by the vast changes incident to the entry of this country into the conflict. But, in spite of these difficulties, it has made remarkable headway, and there is little doubt that, after the return of peace, its development will be rapid and will more than fill the expectations of the people.

FURTHER STEPS.

PERSONAL CREDITS.

It still seems clear that there should be provided a system of personal-credit unions, especially for the benefit of individuals whose financial circumstances and scale of operations make it difficult for them to secure accommodations through the ordinary channels. Organized commercial banks make short-term loans of a great aggregate volume to the farmers of the Nation possessing the requisite individual credit, but there are many farmers who, because of their

circumstances, are prevented from securing the accommodations they need. An investigation by the department to determine the extent to which farmers in the Southern States were dependent upon credit obtained from merchants revealed the fact that 60 per cent of them were operating under the "advancing system." The men I have especially in mind are those whose operations are on a small scale and who are not in most cases intimately in touch with banking machinery, who know too little about financial operations, and whose cases usually do not receive the affirmative attention and sympathy of the banker. Such farmers would be much benefited by membership in cooperative credit associations or unions.

Of course, there are still other farmers whose standards of living and productive ability are low, who usually cultivate the less satisfactory lands, who might not be received for the present into such associations. This class peculiarly excites interest and sympathy, but it is difficult to see how any concrete financial arrangement will reach it immediately. The great things that can be done for this element of our farming population are the things that agricultural agencies are doing for all classes but must do for it with peculiar zeal. The approach to the solution of its difficulty is an educational one, involving better farming, marketing, schools, health arrangements, and more sympathetic aid from the merchant and the banker. If the business men of the towns and cities primarily dependent on the rural districts realize that the salvation of their communities depends on the development of the back country and will give their organizing ability to the solution of the problem in support of the plans of the organized agricultural agencies responsible for leadership, much headway will be made.

The foundation for effective work in this direction is the successful promotion of cooperative associations among farmers, not only for better finance but also for better production, distribution, and higher living conditions. These activities are of primary importance. At the same time, it is recognized that such cooperation can not be forced upon a community, but must be a growth resulting from the volunteer, intelligent effort of the farmers themselves.

The Department has steadily labored especially to promote this movement by conducting educational and demonstrational work. Field agents in marketing have been placed in most of the States to give it special attention, and the county agents and other extension

workers have rendered, and will continue to render, valuable assistance. The operations of the Farm Loan Board, especially in promoting the creation of its farm-loan associations, should be influential and highly beneficial.

What further can be done by the Federal Government directly to stimulate personal-credit unions it is difficult to outline. This matter has received consideration at the hands of many experts and was thoroughly canvassed by a joint committee of Congress. The conclusion, up to the present, seems to be that the field is one primarily for the States to occupy through sound legislation. During the last five years State laws, more or less adapted to the purpose, have been enacted in Massachusetts, New York, Rhode Island, Wisconsin, Texas, North Carolina, South Carolina, Utah, and Oregon. Under these about 125 associations have been organized, but the larger percentage of them have been formed by wage earners in urban centers. The attempt to develop strictly rural credit bodies has met with somewhat more success in North Carolina than elsewhere. In this State the work of promoting and supervising such organizations was placed in charge of an official in the Division of Markets and Rural Organization of the State College of Agriculture. The law of this State was enacted in 1915, and at present 18 credit unions, all of them rural, are in operation. It is noteworthy that the North Carolina law makes special provision for educational and demonstrational activities.

In 1917 the Bureau of Markets prepared a tentative form of a model State personal credits law. This was published in its Service and Regulatory Announcements. In it were embodied the best views on the subject, but it was submitted merely as a tentative plan.

The Department, with its existing forces and available funds, will continue to foster the cooperative movement and to keep in close touch with the Federal Farm Loan Board.

LAND SETTLEMENT.

Interest in land for homes and farms increases in the Nation as the population grows. It has become more marked as the area of public land suitable and available for agriculture has diminished. It is intensified at the present time by reason of the suggestion and desire that returned soldiers and others who may wish to secure farms shall have an opportunity to do so under suitable conditions

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