New Britain herald., 1916-09-29
FARM LOAN BANKS ARE BADLY NEEDED
So Reports Secretary MCAdoo
 After Tour Of Inspection

the Federal Farm Loan Board. who returned to Washington yesterday af- ter a tour of the country to ascertain the feelings of farmers and business men towards the new system of farm loans and to determine the location of farm loan banks, will start out again in a few days to conduct hear ings in the south, the Atlantic states and the southwest. The members re- ported satisfactory results in consult ing the men most concerned in the work. They said that they found in- terest on farm mortgages ra1fging from per cent to 60 per cent per an- mum. The hearings were conducted in states of Maine, New Hampshire, Vermont, Massa chusetts, Rhode Island Connecticut, New York, Mich igan, Iowa. Sc;lth Dakota, Minneso- ta, North Dakota, Montana, Wash ington, Idaho, Oregon, California, Nevada, Utah, Wyoming, Colorado, Kansas, Missouri Nebraska, Illinois, Indiana, Kentucky. and Ohio.
 These hearings members of the board said, were largely attended by farmers and representatives of farm organizations, representatives of agri- cultural colleges in the various states, bankers, business men,, and county agents or farm agents operating under the Smith-Lever Extension act.
 Need for Banks Emphasized
 Board members said also that the need for the Federal farm loan law was emphasized by the inequalities in interest rates disclosed -cse rates ran from per cent. per annum to per cent. per month; and, even where interest rates of or per cent were charged, commissions were exacted from fiat rate of 1 to Z per cent. to rate of from 1 to per cent per annum. Where five year mortgages were made the com- missions, at per cent. per annum, amounted to 15 per cent. of the prin- cipal sum borrowed, and this amount was deducted when the loan was ef- fected, so that the borrower got the use of only S5 per cent of the prin- cipal and paid at the rate of per cent. per annum on the full amount of the loan. In addition, the borrower paid for abstract of title, preparation of legal papers, and recording fees.
 1t was shown in every state wis., 1ted,' said members of the board in a tatement, that even the indus trious farmer of modest means who had only a small farm, but who could offer unquestionable security, was un- able to get farm credit on any terms. Nearly all loan. companies or cor porations have an arbitrary rule not to lend on farms below a certain size; not to lend more than an ar bitrary amount per acre, no matter what the real value of the acre may be, and not to lend less than a cer- tain amount $10OO being the lowest limit. Tn many states it was found that the farmer was never certain that he could effect loan. however good the mortgage security, and that delays were serious, and frequently defeated the purpose of the loan.
 Long Time Credits Wanted.
 ''The investigation showed a wide spread and imperative necessity for the longtime amortization loans at reasonable rates of interest, (not to exceed 6 per cent.) provided for by the Farm Loan act, and it was every where conceded that longtime cred it's of this character will greatly stimulate agricultural development, increase farm ownerships, discourage the growing evil of farm tenantry, which has already assumed alarming
 
 crease farm productivity and en- nance the prosperity of the farmer, and thereby the general prosperity throughout the country.
 ''In several states it was called to the attention of the board that joint stock land banks were being organ ized by questionable means by stock statesmen or promoters who are talk ing advantage of the farmers desire for loans on the amtotized plan to sell stock to farmers. Farmers are advised that there. is no necessity for subscribing to thd stock of any pri- vate corporation for the purpose of securing such a loan, and are cau- toned not to do so except upon an investment basis. The board suggests that farmers make no investments in such land banks until they have first inquired of the Federal Farm Loan Board at Washington as to the char acter and responsibility of such or ganizations and of the men who are organizing them. No joint stock.land banks can be organized under the Federal act, except with the approval of the Federal Farm Loan Board"
 No indication will be given as to the boundaries of the Farm Loan dis tricts or the location of the banks until the completion of the hearings It is expected, however, that the Fed cral land banks will be organized and opened for business in January 1917