The Butler weekly times and the Bates County record. (Butler, Mo.) 1918-1950, 1919-04-10
FARM LOANS "A BLUNDER"
Well-to-do Prosper at Expense OF
Others-Class Legislation.
rom the New York Tribune.

by tile powerful stimulation Of mill
lions oi dollars taken from the ma
tlonal treasury This is the state
ment oi ". l.. Humphrey, for four
teen years Representative of the
State nj Washington in" Congress
and now practicing law, i'll all analy-
sis OF the Federal Farm Loan Banks,
which he has prepared for New
York banker.
Mr. Humphrey charges that:
The system is class legislation.
1t does not promote home building
or buying OF farms.
1t benefits only one farmer out
OF lol.
Only one family i'll COS is benefit
ed,
1t costs the American people $50
To- give the farmer 81.
Ii enables the rich TO obtain an i'll
vc>tulcnt yield equal to 2l.75 per
cent.
1t depriveS the government OF
revenues from taN because the bonds
are tan exempt.
In the midst OF war. Mr.. Hum
phrey says. when the Nation was
appealing for funds. millions needed
tor war purposes were taken from
cral Farm Loan banks to save the
system from disaster The purpose
III the act creating these ban KS was
declared to be to provide capital for
agricultural development, to create
standard forms OF lnve >tments based
upon farm mortgages, and to equal
lze interest rates on farm mortgages.
a more correct title would be An
act to tax the American people to
give special privileges to~a few well
to do farmers, to furnish the super
rich the most profitable investment
in the world and to give them a lc-
their income tax, to discredit the
government bonds and increase the
burden oi taxation OF the American
people.
"Oi course. the great purpose OF
the Farm Loan Act was to aid the
farmer and to encourage the buying
of farms and the building OF homes.
The number OF loans that have been
made t" purchase homes is practical
ly none. while the loans that have
been made TO purchase lands for any
purpose whatever has been almost
negligible. Practically all OF the
home loans that have been made by
federal farm loan banks were made
to take up existing Indebtedness
Remember. these loans are not
made to the poor. to the land hungry
trying TO secure a home, but to the
we'll to do farmer, the average farm
cr borrowing owning property worth
$1,000 or more.
The act creating these Federal
loan banks provided that the bonds
oi these banks be free from taxation
OF every kind. In justice to Con-
gress. it should be said that the most
serious result OF this worst feature
OF the act was not anticipated and
has arisen since Congress passed the
law, owing to the vast issue OF gov
ernment bonds to carry on the war
and the heavy income taxes that
have been levied.
We have remarkable situation
in this country today: \ bond issued
by one OF these banks is worth more
than bond issued by the govern
ment. The creature becomes greater
than the creator. \ Liberty Bond
today is worth about %, while a
Federal Land Bank bond is worth
from Iol l., to Io7. If those dream
ing SocialiStic theorists who have SO
persistently preached that the credit
OF the government is unlimited will
take look at these figures they
will change their opinion. if facts
will change it.
One OF these tax free bonds
drawing 5 per cent interest in the
annual income is more than | million
dollars. would enable him to save
S.3S out OF every $50 interest that he
receives. instead OF paying it to the
government as he would have to do
upon other securities. In other
words the COVE rnment loses $3S out
of every $50 on these bonds. and this
loss the other taxpayers must make
up.
These tax free 5 per cent bonds /
i'll the hands OF the SuperriCh are
worth eL75 per cent annually, the
best and most profitable investment
in the world furnished by the gov
eminent at the expense of the other
taxpayers to the zoo richest people
in America. These are the legiti-
mate fruits of this impractical social
istic plan, and yet it is done in the
name of the poor.
The people in time of wary many
of them at great sacrifices, bought
Liberty bonds, and they were con-
tent to accept from the government
4 I-2 per cent interest, and even less,
if the Liberty bonds are to remain at
the present depreciation. Yet the
government takes millions of its
and uses it. not for war pur-
poses, and gives it to these banks
that issue bonds that enable the ma
tons richest citizens to secure an
income OF 2L75 per cent.
Another thing. the selling OF
these tax-free bonds has had a very
marked effect in depreciating Liber-
ty Loan bonds. very largely because
these taxiree bonds are worth to the
very rich. eI.7s per cent. Every per-
son in America that has bought a