The Agricultural Credits Act of 1923 was one of several measures attempted to relieve the stubborn recession in the farm economy of the 1920s. It was part of the effort to develop special mechanisms for providing credit and loans specifically to farmers.
The act established a network of twelve Federal Intermediate Credit Banks in different regions of the country (corresponding to the twelve regional banks in the Federal Reserve System), each capitalized at $5 million, which were authorized to lend money to farm cooperative associations, which then relent it to farmers. Although helpful to some farmers, the new credit measures did not, historians argue, significantly address what many agree was the most important cause of the agricultural crisis -- overproduction.