Arizona republican., 1918-01-01
AMENDMENTS TO FARM JOAN AC1
 WILL BE ASKED

Representations of the Farm Mort gage Bankers association for the pur~ pose of encouraging membership of the independent farm mortgage concerns in the farm loan system have met with the approval of the farm loan board. The latter is now urging amendments to the Farm Loan Act substantially along the lines recommended by the association. Congress will be~asked to amend the existing law as follows:
 To remove the present restriction permitting joint stock land bank to do business only in the state where 1t 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 S250,0ee or more instead of fifteen times, as under ex- isting law; and
 To raise from to 61z per cent the maximum interest rate which joint stock land banks may charge on loans to farmers.
 Although provision was made in the existing law for the inclusion of joint stock land banks in the system, only four such institutions have been or ganiZed throughout the country. These institutions were designed to supple ment the federal land banks. The
  ed without substantial government as- sistance, in the shape of subscription to nearly the total required capital stock. But the jeint stock land banks could not receive this assistance. Hence the practical failure of this ex- tension of the system.
 The Farm Mortgage Bankers asso- cistion Is made up of concerns which represent more than sl.ooo,0o0, 900 worth of farm mortgages They could not see their way to organize into the system with the interest rate on farm mortgages limited to per cent. be- sides being restricted to operate only in the state in which they existed and one contiguous state Action of the farm loan board in making the condi- tions for these concerns more liberal will undoubtedly result in an import ant addition to the system.
 If congress amends the law as above recommended joint stock land banks would still be compelled to limit inter est rates on loans within l per cent above the selling price of their bonds, even though the maximum were raised 10 6h per cent They would also have to compete with the federal land bank 8 new mortgage rate of 5h per cent.
 One thing the farm mortgage bank CTS asked TOT Wnlcn was not acCeQeu to by the farm loan board was permis- sion to use the name National Land Bank" instead of Joint Stock Land Bank"
 The constitutionality of the Farm Loan act is to be tested in the courts shortly. It has been contended by some people that the creation of the system with practically government subsidy was a species of class legislation which would not stand the scrunity of the su- preme court. The farm loan board, 1T it's annual report. refers to the pending legislation as follows:
 We are advised that the next move of those who are seeking to breal down the system, will be to institute Q suit contesting the constitutionality of the Farm Loan act. The purpose o1 this suit will be to alarm investors whc have already bought bonds, and to dis suade others from buying them.
 There is not the slightest reason tc fear 1t, however. The system is SC strong and its administration is o1 such paramount importance to the az ricultural development of the country that attacks on it ate bound to fail 1t is only proper. however, that thi: warning should be given in order tha the farmers and all friends of the sys tenn should grasp the sinister purpost that is behind these attacks