Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1914-02-20
FARM CREDIT BILL


.r,inistration bill for the establish
,ont of a national rural credit sys-
am II represents the results Of the
.hors of a United States commission
rnointed by President Wilson last
rril to investigate the rural credit
,stem in European countries and
eport thereon.
The bill in the form introduced
,os not the unqualified Endorsement
& the house banking and currency
.ommittee. It represents in the
Main the views of the committee and
- far as the measures general prin-
,,nles are concerned it has the APP
,royal of President Wilson.
President Wilson has been positive
mon one point in regard to a rural
,redit system for the United States
10 is opposed to any scheme by
which the United States government
gould become directly the creditor
# the farmer. This view is in en-
ire accord with the views of the
majority members of the house COM
nittee on banking and currency.
The bill, as introduced, provides
for the creation, operation and
of national farm loan
hank system through which the
Iarm land banks to be established
onder the terms of the act, or to be
created through the federation OF
existing state farm mortgage con-
Germs and farmers banks, shall be-
come the new rural credit system of
he United States.
The bill provides for the organiza-
lion under national charter of
farm land banks by 10 or
more persons. All laws relating to
these banks are to be executed by the
of farm land banks,
who shall head a special bureau in
the treasury departm ent.
The commissioner is to be appoint
ed by the president with the advice
and consent of the senate, at a sal
airy of $4,000 year. There is to be
a deputy commissioner, with a sal
airy of $500.
Two Kinds of Banks
The bill provides for the establish
ment of two kinds of farm land
and profit-mak-
ing. If organized on the cooper
alive plan it is provided that no
stakeholder shall own more than 10
per cent of the share capital, The
are limited to the pre-
vailing interest rates of the commun-
ity, any excess earnings to be dis
tributed among patrons of the bank
in proportion to the amount of bust
ness done with the bank.
Shares of stock in the cooperative
banks are to have a par value of $25
each. A minimum capitalization Of
each bank is fixed at $4,000.
If the bank is not organized on
the cooperative plan 50-year
charter is provided. The bank is to
have power to make contracts, to sue
and be sued, and to be under the
control of board of directors hav-
ing not fewer than five nor more
than nine mem bers.
The specific powers given to land
banks are to accept and pay inter
est on deposits not exceeding SO per
cent of the paid up capital and sur
plus; to receive deposits of postal
savings funds; to make loans for not
more than 35 years maturity on
farm lands anywhere within the
state in which the bank operates,
provided that the farm loan shall not
exceed so per cent of the value Of
improved farm lands or 40 per cent
OF unimproved lands.
Every loan must be reduced by an
hual or semiannual payments on
the principal if the loan is made for
more that five years. The bank is
empowered to issue, sell and trade
IN Its own collateral trust bonds Sc
cured by first mortgages or first
deeds of trust. The interest on loans
may not exceed interest on bonds
by more than one per cent. AS rap
IDLY as amortization pawn ents are
made bonds are to be called in and
paid or purchased in the open mar
Ket and retired.
Bonds may not be issued by the
banks against mortgages running
less than five years. The capital
S'ock surplus and deposits may be
used temporarily for the purchase
Vi mortgages or bonds.
The banks are permitted to do a
eeheral banking business, including
'ne purchase and sale of gold bull
lon' the collection of notes, drafts
ana bills of exchange, the discount
Oh commercial and other short time
paper.
CO-OOarativa ban1yn ,.,o,. ,,.,,, -,