The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1919-01-01
FEDERAL BANKS
SHOW INCREASE
FOR LAST YEAR
High Cost and Scarcity Of La
Dor Eliminated Farm Pros
perity, Says Statement.

WASHINGTON, Jan. Increase in
the lending power of Federal land
hanks and the grant of authority for
them to write fire insurance on farm
property were advocated by the farm
loan board in it's annual report sub
mitted today to congress. Modiflca-
ton OF the Federal Farm loan act so
as TO make the minimum loan $500
instead Of 500. and maximum loans
$4,000 instead OF $4,000 also was
urged.
The report, which was the second
made by the board, was described as
covering "the first year Of operation"
OF the farm loan system. the first year
of the board being spent in organi-
zation.
THE year was one Of very evident
progress" declared the report. which
contained table showing that farm
loan associations increased from 1889
to 3.439 during the year; that the capt.
tai Of the twelve Federal land banks
increased from $10.4S8,23O to $16.250,-
285; that loans in force increased from
$29. ,304 to $149.004,439; that joint
to nine. and their loans now amount
to $7,3s0,734; and that interest rates
Of the land banks was 8 or 51A per
cent and that OF land stock banks was
per cent.
Statistics on Farm Loans.
Interesting information as to the ap-
plications by borrowers of loans from
the land banks was given In a detail
ed statement. dealing with about one
third OF all the loans closed by the
banks. This statement showed that 8
per cent Of the proceeds Of the loans
were used to buy lands; 10 per cent
for buildings and improvements; 60
per cent to pay of existing mortgages;
10 per cent for payment Of other debts,
per cent for purchase OF bank stock;
4 per cent for purchase OF live stock
and 3 per cent for implements and
equipment.
THE loaning OF more than $3.50. 000,-
600 has been Of distinct and direct
benefit to more than Ga 900 borrowers.
declared the report, "and has been Of
indirect benefit to every applicant for
a farm through private agencies.
"A distinct reduction, not only Of
the rate OF interest on such loans, but
also in the accompanying charges, was
manifest Immediately after the pass
age OF the act. When general condi
tons made necessary In December.
1917. an advance of " Of per cent
Z in the rate charged by Federal land
banks. there was proportionate in.
crease In the rates charged by most
Of the private agencies, but these
rates, even in these days Of stringency
and stress. are little. If any, higher
than they were In normal times of
easy money, prior to the establish
ment Of the Federal farm loan system,
and in many localities even lower.
There could be no more conclusive
proof Of the regulatory effect of the
system.
Farmers Not So Prosperous.
while the loans made by Federal
land banks in the last year probably
represent only about one-eighth of the
total loans made by all agencies they
are far greater than any other single
agency. Another illustration is there
fore afforded of the truth that mar
ket can be usually controlled by one
large buyer or seller, IL all the rest Of
the buying and selling is split up into
small lots"
Despite the large production and
high prices. net returns of agriculture
in the 1918 crop year was much less
than Is popularity supposed" declared
the report, which explained that big
profits were eliminated by the scarcity
OF farm labor. its high cost. as also
that Of fertilizers, implements and
machinery.