Norwich bulletin., 1916-03-10
FARM LOAN MEN
CAN'T BE IGNORED.
Bankers Journal Says Hollis Amend
ment is Full of Surprises.

ment is Full of Surprises.
In an editorial on the rural cred
its bill reported by Senator Hollis
with amendments" on February Is
last the March Journal of the
American Bankers association refers
to its as interesting and full or sur
prises in that II opens up questions
which are more than incidents OF the
plan TO provide n means whereby
farmers may borrow money on long
time land mortgages. The editorial
reads in part:
aside from the government aid
features of the bin is this statement
in section %: First mortgages eX-
ecuted to federal land banks or to
joint stock land banks and farm
loan bonds issued under the provi-
siOns of this act shall be deemed ana
held to be instrumCntalities of the
government Of the United States,
and as such they and the income de-
rived therefrCm shall he exempt
from federal state, municipal and
loan taxation
Primarily the exemption from
taxation of the bonds and mort IN ges
to be created under the operation Of
this plan is based on a desire to
make marketable securities OF whose
uHrl-ctableness the supporters OF tho
measure apparently have grave
doubts. To make these securities in
strumentalities Of the government OF
tho United States goes beyond the
achievement OF this desire. II con-
vPrts the government into farm
loan 5-ouC- with the obvious result
IF not the DUrposC-of connecting
with all existing plans of maxim 2
farm loans and Of destroying indi-
vidual initiative md opportunity. L
creates favored class and the cor
reotiCn of the idea of favoritiSm viii
not he found in the repeal Of modi-
fcatiOn Of this provision. but in the
gradual inclusion of other classes in
other favors similar import.
INSTANCES of this tendency toward
favOritism are plentiful. Recourse
need not be had to the patiently pa
| terna'istiC bills which mark only in
| dividual views and viii not be heard
0f AGAIN ut this session of congress
\ Glance a recent events will show
the tendency. An indefinite number
Of CcnGrcssmen in the last session
| mt forward plans to aid cotton
growers by valorizinr cotton
through government assistance
IF by private initiative similar
| plan were sought as n means of rails
| ing OF holding uD the price on a
manufactured product there would
| be instant recourse to the antitrust
| law and the creation of n sweeping
demand that some one be put in Jail
| The alternative propositions are
Of interest as marking the uncertain
| y Of the proponents of the measure
| In the first draft of the bill the fed
| eral farm loan board was made ar
! independent organization. Later
| this was changed so that il is now
| a burca| OF he treasury department
| with the secretary of the trea sury
| as an ex ofFicio member This board
! twelve districts and establish a farm
| land bank in each. If the capita
] of these banks is not taken by pri-
| waite subscription the government
| can subscribe for II and look fol
| the repayment of its advances from
| the stock subscriptions made by the
! farm loan associations which arc L
| be organized by borrowers, il there
are any.
IF no borrowers appear in any
1 district to form farm loan associa.
| tons and to provide the capita
form which the governments ad.
| vances may be repaid the fedora
| land banks may he authorized b.
| the farm loan board to make loan.
through banks. trust companies Of
the time when the farm loan boarI
shall have educated the farmer VI
| 10 the advantages of borrowing
money under the new plan.
"As an alternative to the farm
land banks there is provision for tn,
| organization Of joint stock Ian,
banks, which are to be tn,
creations of private enterprise. Thes
| banks can do about anything tn
farm land banks can do, but Dor
| rowcrs will not subscribe .heir CAPT
| tel and the government will not hell
| them.
The alternative Of joint stock Ian,
| banks stands rs IN irducement L
| private capital to form such institu
| lions. There is no sentimentalisn
| in the provision for the establish
| ment Of such banks and II is thei
establishment by men experienced II
the making Of flrrS loans whicl
holds out the promise of success
The Farm Mortgage Bankers assOCia
ton Of America, whose member
have outstanding farm mortEaE
loans to the amount of $500. 900. OOt
has been giving particular study 4
this section and has made some sug
gestiOns for its amendment that ar
| decidedly practical Despite tn
efforts i'm the hill 20 discourage
the federal land banks win hav
! competition.
"The MN who are engaged in tn
lOaninE c. money on farm mortgag
| are not going ont Of business be
cause Of ATTEMPTED monopoly by nc
/ Of CONGRESS-. IF the law is so de
viSed that instead Of becoming com
Detitors Of the land banks the farT
loan meO viii become IN inteEra
I mart Of tho whole scheme of rura
credits success will he partially Ger
tain. In that event the farmer
who desire to cooperate with on