The Washington herald., 1916-07-14
The Rural Credits Bill.


Since the rural credits bill which President
Wilson, will sign next week has been generously
supported by members of both parties in Con-
gress, it may be ponted2to piece of pro-
gressive legislation that recognizes an element
in our cosmopolitan population too often neg
lected-the American farmer.
Away from the turmoil of the city, interested
in the cultivation of his land, the farmer has
his financial problem to meet less important
to him than the banker in the crowded financial
CENTER and, regardless of the fact that its op-
ponents may, justly otherwise, criticise it as
Intellectual it is specific step in the right direc-
ton. The fact that rural credits legislation was
a part of the Democratic platform makes the
criticism political tinge.
What are the facts? No less authority
than former President Taft states that the farm
ers of the nation during his administration owed
IA mortgage debt of $6.33o,oooooo, upon which
they were paying an annual rate of interest in
cluding commissions and renewal fees of eight
and one-half per cent Assuming this estimate
was correct it indicates annual charge resting
upon American agriculture of more than $780,
100000
Such figures indicate that necessity compels
the farmer to deal with private capital and
private capital takes advantage of the emergency
to extort a rate of interest, that, while legal, i'm
poses an unnecessary burden upon the borrower.
On the assumption that his security being staple
the farmer is entitled to the reasonable
rate of interest that municipalities, corporations
and other business interests now enjoy, the
principle of all rural credits legislation is founded
Under the terms of the present bill land
banks are created in each of twelve districts
throughout the United States. These banks are
vested with authority to borrow money from the
public to reloan it to the farmer. They are given
the power to sell their bonds to everybody, but
they permitted to loan only to farmers who
are shareholders in the system.
For the supervision and investigation of ap-
plicants the bill creates local institutions known
as farm loan associations. These associations
will comprise ten more farmers who desire
to mortgage loans from the land bank
Thus the first duty of the farmer is to become
an intimate part of the system by joining or
organizing of these associations because the
land bank only loan through such an assoca-
ton.
Sufficient safeguards are placed around the
system through its neighborhood features to pro-
tect against spectators and it is further provided
that every borrower when he makes an applica-
tion for loan must subscribe for stock of the
local association to the amount OF per cent
of his loan.
Since the plan is predicated upon the theory
that all who become part of the system desire
to become borrowers the bill provides that the
government shall loan 100000 until the pro-
ject is on a sound self-supporting financial basis
when the money will be refunded.
These are some of the salient features of the
bill. There is much more in detail but the theory
OF it all is to show the farmer that the ma
chinery of the government is just as much at the
service of the resident in the tiny hamlet as it
is for the voter in the big city whether the prob
lem it is designed to solve be financial or other.
wise.
Other nations have rural credit laws, but we
are told by its sponsors that the new American
law is step in advance OF them all Suffice to say
that it is an inducement for the worker to till
the soil and that in itself is a movement that all
will admit ought to be encouraged