The Washington herald., 1913-09-03

The owen-GIass bill, as it was origi-
nalIy brought before Congress. had the
| following as section n:
Loans on Farm Lands-That any
national banking association not situ-
ated in a reserve city may make loans
secured by improved and unincum-
bered farm land and so much Of sec
ton 5l37 OF the Revised Statutes as
prohibits the making of such loans by
banks so situated shall be, and the
same Is hereby. repealed; but no such
loan shall be made for longer time
than nine months" (the Democratic
caucus makes it twelve), nor for an
amount exceeding SO per centum Of the
actual value of the property offered as
security, and such property shall be
situated within the Federal reserve
district in which the bank is located.
Any such bank may make such loans
in an aggregate sum equal to % per
centum of its capital and surplus, or
so per centum of its time deposits.
THE Federal Reserve Board shall
have power from time to time to add
to the list of cities in which national
banks shall not be permitted TO make
loans secured upon real estate in the
manner described in this section"
The House Committee on Banking
and Currency made vast changes in
the bill, most of them for the better.
but left this paragraph Cnow No. 26)
unchanged in even a single letter. One
excellent reason for leaving IL un-
changed was that the section would
serve to repeal the national outlawry
of land which has existed ever since
the national banking law was fully de-
fined in 1854.
In the act of June 5. 1854 Csection
5I37 of compiled statutes) occur these
words: But no such association ina,
tional banking) shall hold the posses
sion of any real estate under mort
gage"
Another most excellent reason for
leaving Section Is unchanged was that
no amendment could give adequate
treatment to one section OF ia words
that proposed to give national banking
value to an asset worth more than
s2S, 900, 900, 900.
Mortgages in National Banks.
In no sense OF narrow criticism. this
section may be adjudged almost value.
less as II stands, except for the en-
couraging notice given to the farmer
that in the strong boxes of the nation
al banks mortgages may be hereafter
legally found.
This section may be likened to a mes
senger calling a suspected man out into
a great public place where all with one
voice will declare that the suspicious
we're groundless. That declaration makes
him feel better, puts courage in his hand.
but cannot solve at once the problems
that have been pressed upon him. 1t is
welcoming the outcast. but il is not kill
ing the fatted calf, as will be clearly
seen.
Who ever heard Of a sane farmer
mortgaginE his unincumbered land in
order to raise just one crop? That is all
that a nine months or a twelve months
mortgage amounts to. A farm mortgage
is for too short a time at three years. II
ought to be much longer, for land repre-
sents in the case of the farmer what
store, fixtures and stock represent to the |
merchant. 1t is the investment by which |
through manipulation he makes living. !
No honest merchant ever dreams of re-
covering his capital in three years II |
the merchant with opportunity to turn !!
over money quickly in the sale of wash |
tubs today, blankets tomorrow, and soap |
the next, has no delusion about such a
thing, It becomes evident as one of the |
hopeless things in our national life that |
men on the land with only one turnover |
possible on the average farm in an /
average year should be led to look to- !