The daily telegram. [volume] (Clarksburg, W. Va.) 1901-1926, 1914-04-18
TALKS
ON THE RURAL
CREDIT SPILL
Government Expert Explains
Measure in Speech before
Farm Conference.
o. AsseelArEn 10,

1
tsv ASSOCIATED PRESS,
CHICAGO, April 1S.-Plans for
farm credits as outlined in the pro-
posed law framed by commission
on agricultural credits after study
| of European systems and now pend
ing in Congress under the name or
the Fletcher and MOSS bill, were
summarized today by DIR. John Lee
Coulter, chief of the division OF agrt-
cultural research in the census bu-
reau at Washington, ID. c., speaking
before the second National Confer
ence on Marketing and Farm Cred
ITS meeting here in Joint session with
the Western Economics Society. He
toll of the study of the commission
of which he was secretary, and add:
ed:
commission covering the problem OF
llong-term or land-mortgage credit.
This was introduced IN the Senate by
Mr.. Fletcher, OF Florida, chairman
of the commission, and in the House
| by Mr.. Moss, of Indiana, vice pres1-
dent of the commission.
New Banking System.
THE first racomm endataon OF the
commission in the bill is that farm
real estate be made the basis of
new banking system exclusively for
IL WIS u4 ESQ 'bhGAl 'SAO 1&s-
land banks be authorized to go into
this business and operate under fed
eral charter. This is opposed to
system of government loans direct
| from the United states to the millions
| OF farmers in the country. But the
commission urged that federal
bureau of farm land banks be estaio-
| lished, to be charged with the duty
of inspection and close supervisor
1 I'D ia VITO
bureau would be related to the farm
land bank as the present comptroller
Iof the currency is to the national
/ banks, or as the Interstate Com
merce Commission is to common
carriers There would be certainty
i from the beginning that no misdee rs
would be allowed, and exploitation
would be impossible.
Restricted Clauses.
'"These farm land banks might be
organized by farmers Cborrowers) or
capitalists Glen 1ers.) They woulo
lend directly to farmers and accept
mortgages, deeds Of trust, vendors
4 Hens etc, as evidence of the loan.
ana in turn they would issue lano
bank bonds in amount equal 10 the
mortgages held or loans made. by
selling these bonds more money
would be Available to lend to more
farmers. etc.
''Many restrictive clauses were rec
| such as-G) No loan shall be more
than twenty per cent OF the paidruE
canital stock of the bank; ~ no loan
| shall represent more than fifty pei
| cent of the appraised value OF the
4 property rnortgaged, in the case OF I'M
proved land, or forty per cent in otner
cases; (3) no institution SHAH take
deposits exceeding fifty per cent OF
the paid-up capital stock, but shall
| depend on the sale OF bonds for funds
with which to make loans; "a no
hank shall make loans for longer
period than thirty-ffve years; CoJ
loans made for a longer period than
five years must be gradually reduced
by the payment of small installment
| each year in addition to interest
! charge; (6) the rate of interest TO
FARMERS shall nnnot exceed the inter
Test paid to bond holders by more than
| one per cent; ca no institution snaIl
make loans for a longer period imam
! five wears an dissue bonds based upon
| the same exceeding fifteen times the
amount of paid-up capital and sur
| plus and (S) al institutions must ac-
cumulate reserve funds, etc.
Special Privileges.
"On the other hand, the farm land
banks are given corresponding spec
ial privileges. For instance, the bonos
are given special fayors wherever they
| apepar; the United States govern
ment vii Invest postal savings funds
in them, thus showing the confidence
of the government in their stability !;
| thustees of trust funds under federal
courts are allowed to invest in them !;
| they may be used as collateral with
| national banks if one wishes to Dor
| row; ETC.; all instruments held by the
bank (incIuding bonds, MORTGAGES
etc) are to be exempt from taxation,
thus removing burdensome double
taxation from the farmers beck.
Other Bills.
| Mr.. Coulter summarized seVeraA
other bills for rural credits now be-
4 fore Congress and added:
.4All or nearly all Of these recognize
most Of the same fundamental bases
| az the commissions bill. Most OF
them, however, provide either for di-
rect loans from the United tSates gov,
| eminent to the millions of individual
farmers, or variations from this; or
on the other hand, provide for the IN
corporation of one or few great cen
trail mortgage banks. The commits
sion was opposed to both OF these