The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1919-07-11
iNTERESTSSTRIKEEAT
FEDERAL LAND BANK
Organized Propaganda to Tax
Farm Loan Bonds Conferred
in Washington:
TAX WOULD FALL ON FARMERS
Mortgage Brokers Would Avoid the
Successful COMPETITION of Govern
ment- Managed instituton-Re-
duction in Rates on Loans.

Washington, .. C.-An attempt
IS being made by farm mortgage
brokers it has been revealed here,
20 nuIIify the farm loan board act,
under plea for repeal Of exennp-
ton for farm loan bonds. This,
it is believed, would prevent the
government from obtaining money
al 5 per cent or less and thus pre-
vent the operation OF the farm lean
banks without loss. Since it is
stipulation of the act that the in
terest on farm loans shall never
exceed 6 per cent, and that also
the banks must stand en- their oWn
bottom, such provision would
effectively kill the banks,
An organized propaganda, with Ed.
| CashelI, a former Iowa newspaper
man, has been started in Washington
with the object OF obtaining the tax
exemption repeal. The repeal Of the
measure would give the farm mortgage /
/ BANKERS a chance to get into their
old job of getting big interest on per-
fectly good loans.
Saving Through Competition.
It is estimated that for every dollar
saved by the farm loan banks through
their own loans, SO has been saved
through reduction of interest rates to
the private bankers. In Iowa, lndi-
ana and Illinois, the interest rates Of
these bankers always were low, but
nevertheless, farmers from these
states preferred borrowing money
from the government to borrowing It
from the bankers.
The bonds OF these banks so far
have proved a good investment. When
they were first issued, they bore in
. terest at 515 per cent. When the bonds
went to sos the rate was reduced to
5 per cent? and they are still selling
at par. They are exempt from federal
and state income taxes.
It is argued by the mortgage bank
ers that the government is losing rev.
enue by exempting them from taxes.
However, Liberty bonds, municipal
bonds and other forms of government
and civic securities are also exempt.
They amount to more than 80 times
the sum of the farm loan bonds to
J date, but there was no effort to OBJ
q tain the repeal of the exemption OF
these bonds, probably because bank,
ers themselves are large holders OF
/ these securities.
Farmer Would Bear Tax.
d Repeal of the tax exemption priv
q lege for these securities would actu
II ally mean that the farmer is to bf
= taxed, not only on his income, bu
81 on his debt as well. This is true il
u no other line Of business.
Il Progressives are planning deter
20 mined fight on this proposal, and It |
ID doubtful if it can be pushed through
l8 even though the reactionaries hold
d strong grip on the next congress. Fo
u one thing, it is believed, the RepHDl
rs cans will not dare attempt it in yle7
at of the impending election Of 1879
n when farmers votes will be VALUABLE
ne Democrats, too, are wary of the mel
Is ace of seeking to help out the poe
Ill nroflteer in the year preceding a pre-
a idnnfial election. All in all, it a
ng naars as though there might be son
I'D chance for the farmer in the NE.
- congress.
On Along Standing Fight.
led rho nresant propaganda represen
-no only a speeding up of the antlfs1a a.
FIGHT which began long before the Ia
creating the farm loan bank W
oil nassed. At first the law provided tn
- o. tba land bank had to sell its bon
rho to bond houses as a concession
ato the hostile interests. 1t was hop
10 that the bond houses would make OF
non a pretensa of selling the bonds a
&c the system would thus fail.
If This sinister purpose was nea
ovo achieved. The bond house which G.
.+1,o tracted to do the work threw 1t
u sa, after selling only $31000,000 of
bonds and had not the organized la
ers reinforced by our great need
food supplies early in the war co
ram to a vigorous defense OF the Dahh
cted would have been allowed to Gle !
: of to the farmers fight congress
non. aside 500. O00, 600 to be at the dlspc
era of the bank and also provided I
very the bank management could nave
hon own selling agency
,nity The refusal to allow the postal
atess ;nes system to work with the
bore. hank as a source of ready none.
'fnre another illustration of the nearly
'tion cessful opposition Of the special
Likewise the bank has
Yards hit by the conniyance OF local
the stractors who frequently delay
yorkg yond all reason the proving II
.enla titles to land to be mortgaged-
intro
hal Eighteen Fargo men who met
rners Week to organize home owl
bills league have taken the'first actlo
were i.corded so far under the new
there building association act passed py
AIDE Nonpartisau League fvglsiatnfe
: Ill Nortl, dakota. By this law Inc