The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1918-03-28
BREAKING DOWN
OF FARM CREDIT
SERIOUS CRISIS
FOR FARMERS
Seed Grain Priority Lien
Creates Havoc In Mort
gage Market
FARMERS ARE
WITHOUT FUNDS
Counted on Getting Money
This Spring and Now
Are Baked
El2E
SPECIAL SESSION
Is BEING URGED
Governor Flooded With
Letters Pointing to
Need For Action
SPECIAL SESSION
IS BEING URGED

North Dakota's credit has been
ruined in the farm mortgage world,
and thousands of farmers of this
state find themselves IN serious I'm
ancial straits as a result of the en-
actment by the state legislative as
senbly, in its recent special session,
OF the seed grain law. that carries
a provision whereby seed grain liens
are made first liens on farm lands.
The situation has become so criti-
cal as a. result of the fact that the
farm loan bank has FOUND 1t neces-
sary to abandon operations in the
state. and the further fact that
private investors are refusing TO
close loans until the situation is
clarified. that North Dakota's crop
production may be materially de-
Immediats steps, It Is generally
conceded by those who have made q
study Of the situation and are--in
position to discuss 1t. are required II
North Dakota is TO restore its credit
and make il possible for thousands
Of her farmers, dependent upon max
ing loans, to proceed unhampered
with their farming operations at this
critical period in the nations food
production campaign.
Special Session Urged.
The suggestion that a special ses-
sion OF the North Dakota legtsla-
tlIre be called by Governor Frazier az
the quickest means Of bringing about
the restoration Of the states credit Is
carried to the states executive to-
day in The Forum.
Such action would be positive, it
is claimed, and would make IL pos
sible for the farmers of the state
who are dependent upon closing
loans this spring, TO proceed with
their operations.
Court proceedings were begun to-
day in Mountrail county, by the
federal farm loan bank OF st. Paul,
but such proceedings, 1t Is pointed
out. must run the gauntlet Of the
court, and there is no certainty that
the supreme court Of the state will
declare the obnoxious priority clause
unconstitutfonal
Delay Forsseen.
In the event that the courts hold
the priority clause constitutional
the farm loans would be in the sane
position they are today, and great
deal Of valuable time would be lost
according to those who are anxious
to bring about the earliest possible
settlement.
II then would be necessary for
Governor Frazier to call the legisia-
ture into special session, and undo
the work OF the special session so
far as the priority clause in ques-
ton Is concerned.
This. it is pointed out, would en-
tail the loss Of great deal OF val
liable time. and might seriously and
permanently impair North Dakota's
farm credit to such extent that not
only would the effects be felt so far
as this crop year is concerned. but II
might extend into the years to come.
Washinaton's View.
Secretary Of the Treasury William
G. McAdoo. sees little chance for ac-
ton there that viii bring about any
change IN the farm land boards
position. In a telegram to Governor
Frazier he suggests that steps De
taken to change the law. His tele-
gram to the governor follows:
"As YOU know" said Secretary
MeAdoo, in his reply to Cover
banks are required by act Of con-
gress to lend money on nrst
mortgages only.
'sThe enactment Of your seed
and feed law with the usual
provision that loans made there
under should have priority of lien
over mortgages previously re-
corded raises serious questions.
both OF law and of the security Of
loans made bv the Federal Land
bank under the act Of congress.
"As soon as the attorney gem
eral OF the United States renders
his opinion I viii communicate to
YOU. VIII you please let the peo-
pie Of North Dakota know that
the officers of the Federal Land
bank OF St. Paul and my COLI
leagues or the farm loan board
and myself deeply sympathize
with the people of North Dakota