Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1914-04-17
PLANS AS OUTLINED IN PRO
POSED LAW FRAMED ny COM
MISSION ARE SUNNI ARIZED At
MARKET CONFERENCE.
FARMERS BANK SYSTEM
FIRST RECOMMENDATION BY BILL
Is THAT FARM REAL ESTATE BE
MADE BASIS OF NEW BANK SlS-
TEN FOR FARMERS.
Or AssOciatcd Prcssl.

u Itti as outilH't III tHt IitiVNti
law framed by a commission on agricul
tural credits after a study of European
systems and now pending i'm Congress
under the name Of the Fletcher and Moss
bill were summarized today by DIR. John
Lee Coulter. chief of the division of az.
ricultural research in the census bureau
at Washington, speaking before the sec.
ond National Conference on Marketing
and Farm Credits meeting here in joint
session with the Western Economics so
cicty. lie told Of the study Of the com.
mission, Of which he was secretary. and
added:
"A specific bill was drafted by the
commission covering the problem of long
term or land mortgage credit. This was
introduced i'm the Senate by Mr.. Fletcher
Of Florida. chairman Of the commission.
and i'm the House by Mr.. Moss of Indi.
ana. vice chairman Of the commission
The first recommendation of the com
mission in the bill il that farm real e.
tate he made the basis OF a new banking
~N ~i'ih tAtlu~lN'fN ~ ldiIltiN. ~ was
urged that farm land banks be author
lied 10 20 into this business and opcr-
ate under federal charter. This il OPP
posed TO a system Of government loans
direct from the United States To the mil
lion of farmers in the country. But the
commission urged that a federal bureau
of farm land banks be established, 10 be
N.l.u.-l w..,l a.. J-t.- 80 .Ds. .rI
close supervision over the institutions
chartered. This bureau would be related
To the farm land bank a. the present
comptroller Of currency j. To national
banks, or as the Interstate Commerce
Commission j. 10 common carriers. There
would be- certainty from the beginning
that 10 misdecds would he allowed. AMI
exploitation would be impossible.
These farm land banks might be or
ganized by farmers (borrowers) or capi-
%talists Clcnders.) They would lend Iii.
rcctly 10 farmers and accept mortgages.
deeds Of trust. vendors liens. etc. rs
evidence Of the loan. and in turn they
would issue land bank bonds in amount
equal To the mortgages held or loans
made. BY selling these bonds more money
would be available 10 lend To more farm
crs. etc.
Many restrictive clauses were recon
mcnded for the sake of safety. such as
an No loan shall be more than % per
cent of the paid up capital stock Of the
bank; 90 no loan shall represent more
than % per cent Of the appraised value
Of the property m%ortgaged. in the case
Of improved land, or 40 per cent in other
eases; 81 no institution shall take de
posits exceeding 80 per cent Of the paid
up capital stock. but shall depend on
the sale Of bonds for funds with which
10 make loans: ca no bank shall make
loans for a longer period than - years;
90 loans made for a longer period than
five years must be gradually reduced by
the payment of a small installmcnt each
year i'm addition 10 interest charge: t6l
the rate of interest 10 farmers shall not
exceed the interest paid 10 bond holders
by more than one per cent: "a no in
~siitution shall make loans for Il longer
period than five years and issue bonds
based upon the same exceeding fifteen
times the amount of paid up capital and
surplus: f>) all institutions must nc.
cumulatc reserve fun,ls. etc.
"On the other hand. the farm land
banks are given corresponding special
privileges. For instan~c. the bonds are
given special favors wherever they APP
pear: the United States government will
invest postal savings funds in them. thus
showing the confidence Of the govern.
mcnt in their stability: trustees ~ trust
funds under fcdcrals courts are allowed
10 invest ir them; they may be- used a.
collateral with national banks il one
wishes to borrow, ETC.; all instruments
held by the bank Including mortgages.
etc are to he exempt from taxation.
thus removing the burdcnsomc double
taxation from the farmers back"
Mr.. Coulter summariz ed several other
bills for rural credits now before Con
grc>s n added:
"-All or nearly all Of these recognize
host Of the same fundamental bases a.
The commission's bill. Most Of them,
however. provide cuhcr for direct loans
from the United States government 10
the millions II individual farmers. or
variations from this: or. ON the other
hlE6. provide for the incorporation 81
one or a few great central mortgage
hanks. The commission was opposed ~
both of these ideas