The daily Missourian. [volume] (Columbia, Mo.) 1916-1917, 1916-08-04
THE RURAL CREDITS LAW

Economically, the farmer has al
WAYS been at a disadvantage. The
farmer has had to sell his products
for what the commission merchant
gives him. This is largely because
the farmers are so widely scattered
over the country and therefore neces-
sarily disorganized. They are unable
to SET their own price as the manu-
facturer does. Because of these dif-
ficulties we have government experts
studying marketing problems.
The farmer has also been at dis
advantage in obtaining credit. He has
never had the same freedom of OBJ
tanning credit on his assets as has the
manufacturer or merchant. In most
states farm loan rates are as high as
4 per cent and in some states as high
as 10 per cent. Inc ldl llei Nhhiio'
obtain loan for more than five years,
and most of them are made for one
wear. Foreclosures have been many.
But a brighter day has dawned. The
passage by Congress of the Rural
Credits Bill should place the farmer
on an equality in obtaining credit
with the manufacturer or merchant.
He will now be able, through govern
ment aid. to obtain long time loans
at low rate.
The administrative features of the
act are patterned after the Federal
Reserve Act, which is certainly a
point in its favor A farm loan bureau
at Washington. controlled by board
of five members including the Secre-
tary of the Treasury, is provided.
These men will be experts. All ex-
penses are to be paid by the federal
government.
This board will create twelve ma
tional land banks, each with a capi
tai of not less than three-fourths of a
million dollars. Opportunity will be
given individuals to subscribe for the
stock. Should there be any stock
which is not subscribed by individ
uals. this will be taken over by the
government without dividends. This I,
provision shows that the act is clear
ly for the benefit of the country and |
not for the government monopoly.
But how is Boone County farmer
to obtain a loan? The law provides
that ten or more farmers must or
ganize national farm loan associa- |
tion. You must join such an associa- /
ton Through your organization you
and the other members may obtain a
long time loan at low rate from the .
nearest national land bank. The coun- /
try will be directed and the board I
after a thorough investigation will To- I
cate these banks in the most geo.
graphically convenient cities. The .
bank in your district will loan you,
through your loan association, at
rate not exceeding 6 per cent. After .
the banks are organized and on pay
ing basis the board will doubtless re-
duce the rate. No loan will be made .
for more than 50 per cent of the land
mortgages.
One of the biggest defects in our
present cumbersome farm loan system
is that the land mortgages are not
standardized. like the bond issues of
railroads, public utilities and muni-
cipalties. They do not find a ready
market, and therefore long time
loans are hard to get and the rates
exceedingly high This act will stand
ardize these loans. The mortgages
are TO be used as collateral security
for bonds issued by the federal land
banks to sell to investors. BY this
means the banks will obtain the capi-
tai TO loan to farmers At the same
time this offers a safe investment.
readily transferable. These bonds
will be free from national, state or
local taxation. So the act will also
be of great benefit to investors. large