Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-05-11
Congress Finds 1t Diff
fiCult PrObIem==COn=
ditiOnS far Different
Than in Europe
One Big Question: lis Private
Capital The Best?"

has recognized existing conditions in
Congress, says a Washington letter to
the Boston Transcript. The land bank
question is a much harder nut to crack
than many persons expected when it
was commonly said that a bill once
prepared by competent authority could
be passed without much debate. Two
commissions, one authorized by the
United States Government and another
sent by the Southern Commercial Con-
gress, had visited Europe to study the
subject of agricultural credits. Their
reports were carefully prepared and
yoiuminous, and it appeared not wild
inference that when these had been
digested and embodied in the form of a
| bill, the most authoritative word had
been spoken.
But the prophets of quick legislation
did not take into account the size of
the United States; the fact that sys-
tenn which might work admirably in a
country like Germany or France might
disclose grave defects in a country
where one state alone is larger than
Germany and France put together.
Moreover, the people of the United
States do not take as naturally to Fed
of Europe, and often see an embarrass-
ment in Federal intervention where
Europeans would see only help
Thus the rural credits bill did not
emerge readily from the congressional
incubator. Several bills were intro
duced, notably one by Senator Fletcher
of Florida and Representative Moss of
Indiana, embodying the conclusions of
the United States Commission. No
bill has been reported yet by the Bank
ing and Currency Committee of either
house: On the contrary, the two
committees side-stepped the whole
subject, to a certain extent by ap-
pointing joint subcommittee charged
with the duty of preparing bill back
of which the Wilson Administration
would be willing to stand.
Now it develops that serious differ
ences exist among the members of
both branches over fundamentals.
Senator Hollis, for example would
have national land bank capitalized
by the Government While Representa-
tive Moss and men of his, school of
thought give cogent reasons why
private capital should be- employed.
Representative Bathrick has intro
duced bill making the postal bank
funds available for use by the land
banks. This is a detail, although
probably an important one, and may
form a separate subject for serious
discussion.
Helping the UndeveIoped Regions.
One of the leading questions at issue
is how best to organize a system that
will provide money in the safest and
surest way for use in the undeveloped
regions where profitable farming ap
pears possible-ip. Mississippi, say, on
the southern border, and in Montana
at the North. The advocates of a
thorough Federal system declare that
money cannot be raised for the de-
velopment of country like this except
through the Government. Interest
rates in these regions are now very
high and they assert that the rates
cannot be reduced except through Gov
| eminent participation.
Another question is whether large
banking districts shall be formed COW
ering several states, in which a CEN
trail bank shall be organized with capt.
tai drawn from private banks in vari-
Gus localities. This system would
resemble the new Federal bank system,
at least in outline and appears the
natural one to adopt, until one hears
some of the arguments advanced
against it. For example, it is said
| that federation of banks of this char
acter would present no greater ele-
ments of strength than existed before.
Again, it is pointed out that the sue
cess of any land bank will depend
largely upon the quality of it's ap-
praisals, and that where money is to
| be loaned by central bank operating
in large area the cost of appraising
must be greater than in a smaller dis
trict-either this or the bank must take
chances which careful banking would
not tolerate.
The Fletcher Moss bill provides for
the incorporation with private capital
of national farm land banks through
the Office of a National Commissioner
of National Farm Land Banks, such
banks to be established to the extent
of one or more in the various states,
according as the necessity for their
existence shall be proved to the salts
faction of the Commissioner. A princi
pie upon which all are united is that
the mortgages taken upon farm prop
erty shall be used as the basis for an
issue of negotiable bonds which shall
be non taxable.
1t is pointed out that this plan pre-
sents advantages over any other mas
much as it would put up squarely to
every community the responsibility for
its own transactions. In the Middle
Western States like Iowa, Kansas,
Nebraska and others in the corn belt,
the land bank problem is relatively
simple. because the farm lands have
O. quick market value which would
warrant free capital in organizing and
supporting bank devoted solely to
farmers loans. In this region interest
rates are relatively low because Almost
any farmer can raise money easily, as
his security is sound and practically
fluid.
Farmers May Not Like This.
No valid objection could be made to
this plan if it would cover only States
of the character named. But it is
said that if banks with private CAPT.
tai are to be organized and then fed
-.