The Birmingham age-herald., 1914-12-27

fact that agricultural operations are sea-
 sonal and involve a longer period than
 ordinary commercial transactions.
 Again, it is provided in the act that
 national banking associations not sit
 uated in the central reserve cities may
 lend on improved and unencumbered farm lands within the federal reserve
 district, and that such loans may be
 made for any period up to five years Such loans may not exceed 10 per cent of the actual value of the property. Any national bank under this provision of the act may lend on farm lands an amount in the aggregate equal to 25 per cent of it's capital and surplus or one-third of its time deposits. The federal reserve act therefore so far from discrimina ting against the farming classes, distinctly bears them in mind. and while not dis | eliminating in favor of them takes just and particular knowledge of their re- I quirements.
 ."rhe matter of additional legisa ton | concerning farm credits was promptly | brought to the attention of Congress by 1 the President at the regular session in l his annual message. and many experts l have been giving persistent and careful attention to the problem
 '"fhe explanation of why special bank | ing arrangements were devised abroad l but have not been extensively planned and operated in this country is to be l found in the difference in economic, so- I cial and banking habits and conditions. This is the only large country that may | be said to have the ordinary banking l habit developed in d high degree, with banking and lending associations demo- l cratized and in touch with the masses of l the people. The great masses of people in
 a number Of European countries do not l have the ordinary banking habit and
 know little about banking practices. The 1 habit of depositinS money in banks, of 1 checking against such deposits, and of l making loans through banks in such l countries is not general This may be 1 illustrated by a reference to the Baak of | France This bank. with Sl,000 GOO of l bank notes, has only S2S5. 0O0 of depos- ! its. bank can utilize its assets either | through notes or through discount and ] deposit and checking. In this country the | assets of bank are utilized to slight
 extent through bank notes the total vol uIne being about s725 1000, ,000 while the | total deposits in all the banks are ST, ,0O0, 1 100000. This testifes to an unusual de-
 velopment of the banking habit among
 our people, Partly because of the lack ! of the ordinary banking habit on the part 1 or European peoples, partly because of the lack of banking facilities and partly | because of other social and economic fac | tors special agencies had to be devised There was great need for some addition I to their machinery. The land mortgage and the cooperative credit arrangements grew up of necessity. Likewise the saw | inss banks were created for similar req
 sons. It is noteworthy that only recently 1 nave saving institutions been established 1 In great numbers in this country, and that | still more recently the government postal
 savings system has been evolved
 Further Improvements Needed
 1 notwithstanding the fact however | that the people of the United States | have ampler financial agencies than any | other in the world. and have developed the habit of using these agencies to a greater extent than any other peoples
 students of rural problems have been
 keenly alive to the need of further i'm 1 lprovements. They have insisted upon extensions of the national banking facilities and the creation of special iagencies in intimate touch with farm. CTS with special view to the better ment of financial conditions in the coun- try.
 | At least two definite measures have
 been prepare and have received specia consideration. They are similar in many respects. They provide, in brief, fol land mortgage associations with smal capital, which may make loans on farm | WllllH d ulSlTiCI or d state
 or within state to the extent of 5( Fer cent of the real values of the farms
 The money arising from such loans i. [ to be used for productive purposes or the farm on which the security is
 based. It is contemplated in one way or another, either through separate as
 sociations or through central agency
 that debenture bonds may be blanketet on the mortgages and offered to tn, public. It is proposed that the opera D tions of the system shall be supervise, by central agency in Washington ant
 that there shall be adequate safeguard , in the way of examination and inspec f tion It Is thought by students of tn, . question that such debenture. bond
 would be safe, would attract capital 2 and would bring into the investmen :, field especially smaller holdings scat
 tered through the country which do no !, now easily find satisfactory investments A plan of this kind. operating througl . private funds, should work safely an, i. would probably result in a short tim in systematizing credit transactions ii rural districts and in reducing the rat of interest.
 "The office of markets and rural organ 3 ization has continued it's study of rura , credits. Information bearing on farr l mortgage loans has been secured iron two-thirds of the savings banks. trus comparlies and state and private bank