South Bend news-times. (South Bend, Ind.) 1913-1938, 1919-12-20
RURAL CREDIT
SYSTEM NOW UP
FOR INSPECTION
Supreme Court is Asked to
Pass on Constitutional
ity of Provision.

Americas rural credits system g.
Up for general inspection and pos
sibly a general overhauling. The
United States supreme court IS ask
ga 10 pass upon the constitutional
tv Of certain Of It's provisions and
congress is asked 20 make certain
fundamental changes in the system.
All this. despite the fact that e
has been in existence and operation
only a little more than two years.
To be sure, this rural credits sys-
tenn IS rather a husky twc-year- Old
Tor there arc almost $3.50. 900 coo OF
loans In force which were made uur-
der and subject 20 the provisions Of
fhc federal farm loan act And the
result has been a reduction OF in
tcrest rates on farm mortgages In
every high interest section in the
United States Hundreds Of thous-
ands OF farmers now get loans ar
lower rates than before, no matter
of whom they borrow. for all mort
cage brokers and bankers have 10
meet the competition Of the land
banks created by the federal farm
H0fiA 4kAr anu AAAk ANW limits ~ EAsh
per cent. the interest which these
land banks may chage.
However. II is possible that. like
al growing children. this two-year-
old should have solicitous attention
and care until & has successfully
,yeathered the ills OF early child
hood. Nevertheless its father Cit
seems 20 have had many fathers)
shudder at the thought Of placing
so young a thing on the operating
table.
Several Bills Pending.
Several bills are pending IN IN
senate and the house 10 alter vari-
Gus phases OF the system and. nat
urally enough. some of these bills
are strangely like the arguments
which were made against the system
by its enemies at the time it was
first conceived.
But. make no mistake. no one
who has introduced a bill will con
sent to being classified as an op-
ponent Of the farm loan system.
ON the contrary, all are endeavor-
.ng 10 appear as public benefactors,
concerned only with the public
good. Each one adjusts his naiO and
procIaims himself TO be personally
lisinterested.
These amenders OF the federal
farm loan act include farm mort
cage bankers. representatives of
some Of the life insurance com
panies. a few members Of the SEN
ate. some OF the house, presidents
az federal land banks and perhaps
one or two members OF the farm
loan board.
Members OF such a group might
be expected TO entertain somewhat
conflicting ideas as to how the op-
Grafton should be performed.
The federal farm loan act pro
,idcs for q dual system or land
banks. IL provides one kind OF bank
To carr on a cooperative system
If farm loans. II provides another
kind of bank for those farmers who
object 20 joining cooperative or who
at least do not feel the need OF CO
operation. Federal land banks are
maintained for cooperators and
make loans through cooperative so
cictirS Joint stock land banks are
maintained for individuals and make
loans to individuals.
Would Kill Land Banks.
Drr crowd OF amonders advises
ampat5tinc the joint stock land
banks from the remainder OF the
system. Sen. Smoot, or Utah. and
Rep. McFadden. of Pennsylvania.
prcsumluE 20 speak for this group,
have introduced bills 10 abolish
Joint land banks and wind up their
affairs. Another crowd Cor perhaps
the same Crowd) has recommended
somewhat mildcr treatment. Tor
this group. Sen. Smoot introduced
a bill 20 deprive their farm mort
cages tsN-eNempt bonds. This
would accomplish the same purpose
rs thc other bill without seeming
90 be quito so brutal.
Then comes a group which has
eli tho appearances Of Innocence.
Tor these. sen. Hitchcock Of No
uraska. has introduced n bill go per
nit the federal banks 90 lend as
much as $3.50 20 q single farmer.
thus removing the $4,000 limit
placed upon loans 20 be made hy
Y
on an the beginning by those who
wanted To protect the small Dor
rover from tho cncroachments or
the big borrower.
The old-style wortea SO banker
who sees his business drifting over
% the new form Of hank which b.
making amortized loans az low rates
and or long terms and who also
sees his profits reduced on tho bust
ness he Is able 90 retain. seems 10
have a perfectly good grievance.
viewed from the standpoint or the
money lender.
Another source az opposition
Gems TO have fits origin among those
who should be able 20 rise above
an selfish ambitions and 10 look
upon the farm loan system as one
created for the benefit Of the farm
or. end not for the particular adj
vantage az money lenders
land Banks Attitude.
Here and there "a president OF a
federal land bank has lost his sense
q direction and also his compass.
Apparently he has forgotten that
federal land banks were created 90
~ru.rfTa -rrTFf f-~F4f.a To- rR-., e.