The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-01-08
FARM LOAN BOARD
HAMPFREO BY WAR
First Annual Report Asserts Ameri-
can Agriculture. Is Facing SeTi-
ous Situation--Iarge Capt.
tai withdrawn.

Washington, Jan. THE first an
nual report OF the farm loan board
points out that the withdrawal OF for
eign capital and a considerable
amount of domestic capital from the
farm loan field, rs "a result OF govern
ment borrowing and the more attrac-
tive rates offered In railway. munich
pal and other investments, had
drought Americanagriculturs face TO
face with a serious financial stu
ation.'
The report, as submitted to Speaker
Clark, states that millions of dollars
Of foreign capital which had been In
vested In farm mortgages in the
United States have been withdrawn
on account of the war: that the funds
of large corporations and individual
| investors, which have been employed
| freely in the making Of farm mort
| cages in the past. are being kept in
NJ ore liquid and available form on
account Of the war conditions. and
great deal Of local capital hereto
| fore loaned to farmers has been d.
verted because of more attractive in
terest rates in other fields.
| It says that all of this has thrown
a tremendously increased burden
upon the newly created federal farm
loan system. Not only has the reduc-
tion in the amount of available funds
for farm loans increased the demands
upon the farm loan system. but II has
multiplied the difficulties under which
+. the farm loan system operates because
the capital which the federal land
banks lend TO farmers IL procured by
the sale OF farm loan bonds, and the
sale of these bonds has been inter-
! fered with by this abnormal financial
condition.
! To provide relief from this condi-
ton. the report of the federal farm
loan board, which Ia signed by the
secretary OF tho treasury William u
McAdoo. its ex-officio chairman
/ George w. Norris, farm loan commits
sioner; Herbert Quick. w. s A.
smith and Charles E, Dobdell, mem
bers. urges congress to authorize the
secretary OF the treasury to purchase
farm loan bonds during the year 1918
70 the extent of 100000 900 II neces-
sary. these bonds 10 be resold TO IN
vestors ag the demand for them de-
velops.
The board urges this step, aA
4 means OF providing the basic indus
trv of the United States with the cap
jtal needed to increase food produc~
ton during the war; to stabilize IN :
forest rates. and 20 encourage the
/ purchase of the bonds by relieving
/ nurchaaers of the fear that the oonds
may he pushed for sale at onpro-
pitious times. Briefly. the otner
! recon- nendations contained In this
annual report are.
That the cooperative farm loan az
ISOLATION. or borrowing group prov'u
ed under the federal farm loan act
he given another year of trial before
anv consideration be given 70 amend
t{ne the act to make the method OF
borrowing more direct;
That the maximum loan limit per
roitted TO the individual borrower De
Increased from $4,000 to $4,000
/ That the denominations OF farm
loan bonds be changed from sZe 20
SEQ and from $50 to $40. to eliminate
the fractional cent In the computation
/! Of semi~annusl interest;
i That the provisions governing JOINT
stock land banks be amended to al
low such banks to operate In more
than two states: to increase their
limit Of bond issues to twenty times
their capital stock instead of fifteen,
land TO raise the authorized rate or
Interest from 10 Ia per cent Inns
ia not TO be confused with the au-
ttborized maximum rate of per cent
ALLOWED the FEDERAL land hanks.
A feature of the annual report 10
Ithe discussion OF the cooperative Ma
tiopai Farm Loan associations, ana
the acceptance OF the principle or CO.
Operative borrowing by the American
farmer. II Is pointed out that up to
December I. t517. 1,s3s of these Co
operative associations had been char
tered bv the federal farm loan board;
applications had been fled for s219.-
l7to.740 of loans. the twelve federal
Hand banks had approved loans
Amounting to s105.136,529, and loans
he'd been as.ua1iy paid out to farmers
amounting to s29s74,66s. In addition
to the sac associations actually char
tered. 1855 other associations were
getting ready to be chartered.
The obstacle pointed out In the CO.
operative association Is not any fail
ure on the mart of the farmer to par
lticipate In this first nationwide effort
at agriculture cooperation In Amer
lea but rather one of sffic' ~ admin
istration. The board raises the ques-
ition OF whether or not the advantages