The Yale expositor., 1917-03-22
FARM LOAN ACT.
VI. Its Social and Economic
Effect.
(By Frank II. Wilson, federal loan bu
reau. Washington. ID. c.

The main points of the federal farm
loan act have been set forth in the
preceding installments. The reader
will readily see that this act is new
thing In this country, and is liable to
have an important effect on our social
and financial life.
Let us briefly suggest some of its
possible effects:
The rapidly increasing cost of living
has of late given American thinkers
n great deal of uneasiness. The fact
is everywhere recognized that our city
population has been increasing more
rapidly than the rural population. Ev-
cry day there are some more mouths
to feed, but there is only slowly in
creased acreage upon which this food
Is produced. Two important facts are
therefore patent:
First, more farms must be established
! to provide homes for more producers,
and, second, the land under cultivation
must be farmed more carefully and
with more and better equipment to
meet the growing demand for food.
The farm loan act will have strong
influence toward a realization of both
of these ideals.
Will Reduce Tenantry.
Farm tenantry is curse whose
worst effects are lowered fertility and
inefficient farm methods. The tenant
is not normal farmer. The transient
nature of his living makes maximum
production impossible. He is often
not a meat producer, because he is
not on one farm long enough to build
up herd of live stock. He is grain
farmer, and grain farmer is a sapper
of fertility. He is engaged in the past
time of hauling the fertility of his land
lords soil to market With approx
mately one-half of the farm lands of
the country in the hands of tenants,
America is cashing In her land fertil-
| ity at an amazing rate.
The farm loan act has for one of
its important purposes the placing of
land into the hands Of owners who
will farm 1t with the inspiration that
comes from ownership. The owner of
| land treats it so as to conserve its fer
tility. He is a permanent fixture in
the neighborhood. He markets his crop
through his live stock, returning the
fertility to the soil. A nation of land
owners means a nation with con-
stantly increasing capacity to produce
! food for its people.
But the farm loan act will do more
for agriculture than merely supply.
ing cheap money. The act actually
specifies how the money borrowed
shall be spent. 1t says that unless
used to pay debts, ii shall be spent on
things that will contribute to more
production on the same acreage. So
the farm loan act means higher and
better type of agriculture.
Will Stimulate Cooperation.
But some students of the act be-
lieve its greatest contribution will be
the stimulation to the practice of CO.
operation. Cooperation is its basic
fact. Farmers are required TO get to-
gether into groups to secure its bene-
| fits. When they put their mortgages
together for the sake of getting cheap
C1s
Of cooperating In other problems of
'ommon interest. Who knows but that
these cooperative associations may be-
come the business and social units of
farm society?
The financial saving to the farmers
of America would alone be enough
to justify this enactment. On vol
ume of four billion dollars our farm
ers are paying now nearly per cent
annually, all of which Is a tax on all
the people because it limits consump-
tlon by handicapping the producer. If
this rate should be reduced by per
cent it would mean an actual annual
saving of $160000,000. But this esti-
mate of the money to be saved does
not take into consideration the fact
that the normal volume of farm loan
business will greatly increase with an
advantageous interest rate.
The success of the farm loan bank
themselves. They have been given
the cooperative machinery to finance
themselvs without profit to any indiv-
iduals. They have been given the ma
chinery for governing their own finan-
cial institutions and maintaining con-
troll of them. So carefully is their
ownership guarded, no matter who
buys stock In the federal land banks,
that eventually none but the farmers
may have voting power.
Yes, the federal farm loan act is
somewhat revolutionary. 1t upsets all
past practices In farm finance. 1t puts
the interests of the majority above the
interest of the few. 1t gives the under
dog a chance. 1t writes Humanity
First" across the ledger of modern
business.