Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-12-24
LAND BANK OFFICIALS
EXPECTING OPPOSITION
Think Antagonistfc Interests Will
Try to Break Down Farm
Loan System.
WILL REMOVE RESTRICTIONS
Proposed Amendments Contemplate
Widening Of Ideas Usages-Will
Permit Private Banks to Come
Into System and Raise Interest.

Federal Farm Loan Board announced
to-day that il advocates amendments
TO the farm loan act under which many
private farm mortgage bankers may
enter the government system as joint
stock land banks. At the same time
tho board also gave warning that it
expects interests seeking 10 break
down the system 10 file = suit soon to
test the constitutionality OF the act.
Amendments 10 the existing law.
which will be specifically recommended
TO Congress in the boards forthcoming
annual report, arc:
TO remove the present restriction
permitting a joint stock land bank TO
do business only III the state where il
is situated and one contiguous state;
To permit a bank to issue bonds TO
the amount OF twenty times its capital
stock, which must be $3.50, 600 or more,
instead OF fifteen times. as under exist
ing law, and
TO raise from 6 TO L. per cent the
maximum interest rate, which joint
stock land banks may charge on loans
10 farmers.
All these amendments have been
souEh; by the Farm Mortgage Bankers
Association. whose leaders predicted
that n large proportion of the MEM
bers would seek government charters
and operate under supervision OF the
farm loan board il the notifications
were made Their plea TO be allowed
to use the name National Land Bank"
instead OF Joint Stock Land Bank" has
not bccr received favorably by the
board. owing to fear of confusing the
private institutions with tho govern
,ncnt's twelve Federal land banks.
INTEREST RATES LIMITED
TO FER CENT OF SELLING PRICE
Joint stock land banks would still be
compelled TO limit interest rates on
loans 70 within per cent more than
though the maximum were raised to
IL per cent. They also would have
10 compete with the Federal land
banks new rate OF 5 10 per cent.
In statement explaining the finan-
ciai condition OF the Federal land
banks, the farm loan board said:
we are advised. that the next move
90 those who are seeking 10 break down
the system Will be TO institute suit
coatestine tho cons;itutionality of the
farm loan act. The purpose Of this
sui; will be 10 alarm investors who
hsvs already bought bonds. and 10 dis
suade others from buying them.
There is not the slightest reason
20 fear Il. however. the system is so
strong, and its administration is OF
such paramount Importance 10 the ag-
rioultural development OF the country
tina; attacks on IL are bound TO fail.
j. IS only proper. however. that this
warning should he given in order that
the farmers and all friends OF the syS
tom should grasp the sinister purpose
that is behind these attacks"
Recent charges that the Federal land
hanks arc not self-supportinE. based
or the boards application to Congress
r for an appropriation of Sl0000o.0Q0 a
wear for this year and next. with which
tho Treasury might absorb any farm
loan bonds not sold privately. were met
by explanation that the average i'm
pairment Of the }7oo.0co capital with
which each bank started six months
ago. representing government stock
subscriptions, amounts 10 6 per cent, or
$4,000 each. This is more than coun-
terhalanccd by farm loan associations
subscription to additional stock.
amounting to more than ,l,500000, or
about $4,000 for each bank. Actual
capital OF all banks consequently is
about slo000,0co. or tl,eco,000 more
han their oriaina! capital. furnished
by tho government.
LOANS TO FARMERS
INCREASING RAPIDLY
Moreover. Says the boards state
ment, the volume Of loans TO farmers is
increasing 50 RAPIDLY that several OF
The more active :s.tnks. III permitted to
continue their.t're>cat rate OF growth.
VIII loo able TO begin the repayment Of
the government subscriptions to their
stock inside OF eighteen months
For the last six months says tho
statement, the banks have paid out
n2ncy continually, with hardly a dollar
Of roeci0t= Expenditures were for or
@a"!Gatoas iurnlturc, stationery. rent
fnr CNsr'cre. Office force. ctc.--salario4
for icGa' advisers TO examine land
Got 1..r a 900,