Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1916-07-27
BANKERS CHARy OF TALKING
Rural Credits Law Affects West
More Than East.
Law Likely to he ibersOme in It's
Workings-Plcnty of Money in
city for Any Reputable
Farmer.

The new law affects the West rather
than the East, and anyhow its effect will
not be seen in the East or New England
for some time yet his seems about the
consensus of local bankers views regard
ing the workings Of the new rural cred
it's measure, which became law lately.
Some of the bank officers and cashiers
talked with did not take the new act very
seriously They expressed the opinion
that the government had placed so many
restrictions on the procedure Of borrow
ing and repavng loans that the farmer
would be deferred from giving a mort
gage or becoming a member of a farm
loan association. one man said that con-
ditions in Burlington were already salts
factory to the farmer, and the same thing
was true probably of the rest of the
state. Any reputable farmer could obtain
all the money he needed on n well-kept-up
farm at interest rates of from Ave to six
per cent. This view was confirmed by
other bankers. who stated what the law
of the state Isl Namely, that no more
| than six per cent. interest can be required
and five per cent. has to be charged,
| by savings and trust institutions at
| least. because of the State tax of seven
mills on every dollar Of deposits. This
| ITO of one per cent, added to the four
| per cent interest which both sorts of
| banks pay and the added margin neces-
sary over and above these combined
! items in order to do n profitable bust
ness. practically prohibit these banks
| from getting less than FIVE per cent.
on first mortgages. There is not
/
paying as little as that. Savings
banks. unless their deposits are large.
hesitate to invest deposits in bonds
paying less than five per cent. al
though they sometimes do even
though the transaction means a loss
of money. Trust companies in YER
mont have an advantage over savings
banks in being permitted to carry
checking accounts. National banks.
like the Howard National and Mer-
chants National, have to pay a similar
tax to the city unless they agree to
| pay the State 10 Of one per cent. on
all deposits yielding depositors over
two per cent.
| One officer of a local trust company
said tho government was not going to
loan it's funds any more readily than
banks would or could do
Every man talked with, however,
was unwilling to give a definite and
final opinion for or against the new
law because he was not yet thoroughly
familiar with it.
cO,rr, OI, Avg EE ,TI-pEs
Inc folIo"lng FEATURES OF the rural
credits law are or particular appllca-
tion ana Importance. IN" law says
leoerai lana banks ana haNohai iarHH-
loan associations are SUBJECT TO taxes
Tbot is such tav ne Tho Vermont
state tax on state banks or CIV OF
one per cent. couid not ne leNeu upon
deposits Oh savings banks ana trust
companies which might be authorized
as agents pF the i'd'ral farm loah
board in place or farm loan assocla-
tlon' IN case an ASSOCIATION was not
started within year and after a
years time seemed NhllkclN 10 ne
Another feature says no more IMAM
SIX per cent. interest may ne 'ha'E'u
exclusive OF amortization payments
NO more IMAM SIN per cent may De
charged IN vermont ana many OF the
eastern states anEhoW' ana 'hlS pro-
vision seems plainly aimed at western
by-night banking associations take ao-
vantage OF state laws ana mulct the
, FARMER
Another teat"re OF the OH "hich IN
dlcates that IL was aliiled at western
conditions perhaps Is tnat "hl'h pro-
vldes FOR loan OF not TO exceed OF
pei cent % '' '"'"V Va ,'' ~ ~
sell ana ~ per cent on the improves
menus feckoheu OUT the total per
centase IS less 'i'ah pa''Ners r's"t mere
; !" 'he CITY a''o"' "''''''' Wv i'' o'''
CITY BANKERS VIEWS
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