The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1918-03-21

taken by the federal farm loan board
in Washington, was issued at st. Paul
by Pres. E. G.. Quamme Of the ST.
Paul bank. The federal board state
ment supplements that previously is
sued by President Quamme, and COW
ers part of the same ground covered
by the president, and goes more into
detail on. several other points. The
complete statement follows:
Caused Much Concern.
THE passage Of the seed and feed
law by the North Dakota legislature
has created a situation which has
given the farm loan board much con-
Germ. The law authorized the county
commissioners to make loans to
farmers occurred by mortgages which
were to have priority over all other
liens except those in existence when
the act took effect. which was Jan. 80.
THE farm loan act provides that
no federal land bank organized under
this act shall make loans except upon
the following terms and conditions:
First, said loans shall be secured by
duly recorded first mortgages on
farm lands within the land bank dis
trict in which the bank is situated.
The bonds issued by this bank are
sold upon the assurance that they
are secured by the pledge OF mort |
cages which are first liens on the
lands of the borrowers.
Both the plain intent Of the
law and good faith to purchasers
Of bonds requires that these
mortgages should not emily be first
liens when taken. but should re-
main frat liens during the term
Of the loan.
Creates Discrimination.
THE North Dakota law creates, |
Internationally. no doubt, an I'M
fortunate discrimination between |
borrowers. To the own
srs whose lands are already encum-
Oered il permits loans to be made on |
4 security OF second or third lien,
but in the case Of owners whose /
lands are not encountered, or who in
lend to pay off existing mortgages by
making new ones, it requires that the /
len which they give to the county
shall be a first lien. In the case Of
owners who desire to borrow from
The federal land bank the farm loan
let requires that they shall give the
federal land bank a first lien, while
he state authorizes them to borrow
rom county commissioners and de-
,lares, in effect, that the lien given |
70 the county commissioners shall be
superior to the lien given to the fed
sral land bank even though the lat
.er was prior in time OF recording,
Laws Are lrreeoneilahle.
THE two laws are apparently
and the state laws
make is impossible for the federal |
and bank to make further loans in
hat state unless the new state law is
.ither modified or judicially construed
n a way different from its apparent
meaning.
"To handle the large business in
hat district the St. Paul federal
and bank has the largest force of
my bank in the system and has
closed loans to the amount Of over
~, 000, 900, which is about $1,000, 900,
above the next highest. OF this S12,-
D0O,0 900, in loans more than Sc 600, 900
nave been closed in North Dakota,
prior to the passage of the act and
therefore, notaffected by it. This is
Dver a million and a half more than /
my other state has received in the /
United States.
Cannot Anticipates Decision.
''The farm loan board is anxious Il
hat the farmers Of that state should
continue to be served by the bank
ind has devoted much time and eff
'ort to adjust the matter, but has not II
vs. vet been able TO find a solution. 1t II
nay be judicially held that the state
aw is an unconstitutional interfer-
,nce with the functions of a system
by q federal law, but we
.annot assume that. In the event /
hat it will be so decided, we have II
to the St Paul bank that II
test case be brought at once and II
hat every effort be made to secure a
prompt judicial decision
ere &Hf- HnnFa3nvp abn4yTI -zv1Ta 4
upon the law so as to II
nable the federal land bank to cons
inue to serve the farmers Of North
Dakota, it will be a qualification to
he farm loan board and to the offi-
ers Of the bank"