Elko independent. [volume] (Elko, Nev.) 1915-current, 1916-04-04
HERR|CK ATTACKS
FARM LOAN BILL
BY Pae. and IntI News Service.

CLEVELAND. April An a long
letter to the Cuyahoga County Bank
ers Association, made public here to-
day, Myron T. Herrick. former COVER
nor Of Ohio and ambassador to France.
attacks the rural credits bill of Sena-
tor Hollis, a Wilson administration
measure. He says 1t Is useless. de-
fective and dangerous and ought not
to pass"
Mr.. Herrick asserts the bill is not
cooperative, as Senator Hollis states.
Senator Hollis is also opposed by Mr..
Herrick in his claim that the profits
of the system would be distributed
says this could not be so, since any
body may own the divident paying
stock of the Federal land banks. He
also asserts that the terms imposed
for borrowing are so restricted that
the benefits of the proposed system
would not be available for the average
farmer The bill will probably come
up in the Senate within the next
week.
There are important as we'll as
minor objections to the Hollis bill.
1t contravenes the spirit of American
government in its plan to enact special
as distinguished from general laws,
and to create a federal bureau clothed
with both executive and judicial pow
ers and authorized to establish a sys-
te through which, when congress Is
not in session, II may abstract for use
of private individuals from the public
treasury at two percent or for no in
terest, and involve the credit of the
United States in the issue of unlimited
millions of dollars of bonds bearing
interest at a rate as high as five per-
cent per annum and running for in
definite periods, even to several future
generations. The bureau may estab-
lish any number of government ranks
in addition to the twelve first ones;
and since no maximum rs prescribed
for capital stock, such public instiru-
tions may emit, upon forms prepared
by the secretary of the treasurer and
comptroller of the currency and upon
the certificates of officials of the
United States, continual issue of
bonds that may be endless. so long as
qualified mortgages may be supplied
"The bureau may withhold the bene-
fits of the proposed system from any
state or from any group of farmers;
1t may shift the public funds, and,
through Its registrars, certain other
funds of the land banks, and direct
such funds to any section of the coun-
try, as 1t pleases. The bureau may
arbitrarily entirely forbid bond issues
and fix different rates of interest for
bonds and loans, according to district,
and even fix the rate after the bonds
have been issued, and thus 1t can
favor one land bank to the detriment
of any other land bank, and force the
latter to suspend business. The bu-
reau has absolute authority to grant or
disallow charters and to dissolve any
land bank or association, appoint the
receiver, compound debts and claims,
cancel obligations to the United
States, and dispose of assets in any
way it sees fit. The courts cannot in
tervene, II 1t acts first, and no disso-
luton shall occur without It's written
consent. No appeal can be taken from
any of its decisions. The bureau is a
supreme autocratic body, with its
great powers absolutely unrestrained
except by its own discretion and pre-
judices. This bureaucracy is not
American"
Mr.. Herrick's recommendations are
as follows:
I'm view of these minor and import.
ant defects, the Hollis bill does not
present a workable plan. Instead of
passing a special act for utilizing the
cash and credit of the United States,
and for creating a centralized system
composed Of such incompatible ele.
ments as public banks, capitalistic
companies, and cooperative associa.
tions, II would be better for Congress
to pass law, general in It's nature
(like the National Banking Act), un.
der which plural competitive com.
panies might be formed for granting
loans to any class OF landowners elect.
ed by their charters. The specific es.
sentials OF such law are few and
simple, their purpose being to regulate
bond Issues, enforce rigid supervision,
and safeguard borrowers from oppres.
sion and investors from losses, and to
require enough capital stock to assure
a strong financial standing. Inasmuch
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