East Oregonian : E.O. (Pendleton, OR) 1888-current, 1918-01-18


tic capital from the farm loan field
as II pesult of Eovernnental borrow
/ ings and the more. attractive interest
# rates offered in railway, municipal,
ard other Investments has brought
American agriculture face to- face
with serious financial situation, it
4 is pointed out in the first annual re-
port OF the federal farm loan boaru,
submitted to tho Speaker of the House
! of Representatives.
Millions of dollars of foreign capi-
al which had been invested in farm
mortgages in the United States have
been Withdrawn on account of Iho
war; the funds of large corporations
ana Individual investors which have
/ been employed freely in the making
of farm mortgages in the past are be-
I ing kept in more liquid ana available
I form on account of The war conditi-
/ lens, and n great deal of local capital
heretofore loaned to farmers has been
diverted because of more attractive
/ interest rates in other fields.
Burden on New System.
An of this has thrown a tremen-
dously Increased burden upon the
newly created Federal Farm Loan
f y
in the amount of available funds for
farm loans increased the demands up
ON the Farm Loan system, but it has
multiplied the difficulties under
which the FARM Loan system oper-'
ates because the capital which the
Federal land banks lend to farmers
is procured by the sale Of farm-loan
bonds, ana the sale of these bonds
int. l,,- III, I,
normal financial condition. To pro-
vide relief from this condition the
report of the Federal Farm Loan
BOARD, which is signed by the Secre-
.tary of the Treasury, VIM. G. Nc
Adoo, cX-officlo chairman; George w
Norris, farm loan commissioner; Her
bert Quick. W. S. a. Smith, and
Charles +. Lobdell. members, urges
upon Congress the Importance of au-
thoriAirg the Secretary of the Treas
ury TO purchase farm-loan bonds dur
ing the coming year to the extent Of
$l00.0 100000 il necessary. these bonds
to be resold to investors as the de-
mand for them develops.
The Farm Loan Board urges this
step as means of providing the basic
industry Of the United states with the
duction during the war, to stabilize
interest rates, and TO encourage tho
purchase of the bonds by relieving
purchasers Of the fear that the bonds
may be pushed for sale at unpropiti-
Gus times.
Other Recommendations i'm Report.
Briefly, the, other recommenda-
tions claimed in this annual report
are:
That tho cooperative farm loan as
ISOLATION. or borrowing group, provid-
ed under the Federal farm loan act,
be given another year of trial before
any consideration he given to ann
ending the act to make the method
of borrowing more direct. That the
maximum loan limit permitted TO the
individual borrower be increased
from $40 900 TO $25,
That the provision enabling 4 bor-
rover TO pay all or any part of his in
debtedness after it has run five years.
in multiples of $25. be amended to
enable him TO pay all or any number
of annual amortization payments on
any interest paying date.
That the provisions governing Joint
stock land banks be amended to allow
SdtH DviIlkS ~ operate III more IMAM
two states; to increase their limit of
bond issues to 20 times their capital
stock inctead of Is, and to raise the
authorized rate Of interest from to
5la per cent. This is not to be con-
fused with tho authorized maximum
rate of c per cent allowed the Federal
land banks.
Cooperative Associations Chartered.
trrfc ts.,.,- So,
report is the discussion of the CO.
operative national farm loan associa- /
tions and the acceptance of the prin-
ciple of cooperative borrowing by the
American farmer.
The obstacle pointed out in the CO.
operative association is not any failure (
On the part of the farmer to partici- /
pate in this first nation wide effort at /
agricultural cooperation in America,
out rather one of efficient admins
ration. The hoard raises the qucs-
ion of whether or not the advant-
Iges Of cooperation. as thus provided
the disadvantages of greater
lelay in the time Of closing loans re-
nltant from cooperative group ac-
ion, the report says.
1T is impossible for this board to
xpress, at this time, any unanimous
nd well considered opinion on these
ubjccts. Tho matter is alluded to
My for the purpose of calling it to
he attention of the congress in view
t the possibility that a year hence
he board may feel called upon to
Iake some definite recommendation
or such an amendment of section i
g would permit prospective borrow
RS to resort to the method of indi-
idual contract rather than TO the CO.
perative mchod."
Examination Of Titles.
Another important phase of tho
aport is the discussion of land titles
nj their investigation. The eyami-
alton Of these abstracts cost a grand
Ital Of $3.50. 900 expended to eliminate
opelessly defective titles. One Fed
al land bank found only two in
lrably bad titles in 1,0jG examine +,
ons. The board cites this as an eco ,
pmic waste. which should he climi- ,
lted if it can be done with entire ,
fcty. and promises to make further Z
vcstigatiOns and submit recommcn- !
iti0ns at q later date. y
Regarding the cost OF operating the {
Federal land banks the report calls I