Spirit of Jefferson. [volume] (Charles Town, Va. [W. Va.]) 1844-1948, 1920-01-06
FARMERS TO OWN
BIG LAND BANKS
George w. Wickersham Tells
How Federal Institutions
Will Be Taken Over.
TO BUY GOVERNMEt; STOCK
Eventually the Borrowers viii Ac-
quire Complete Ownership of Banks
Established Under Federal
Farm Loan Act

That the federal land banks and the
Joint stock land banks are important
supplements to the national bank sys-
tenn and the federal reserve system was
emphasized by former Attorney Cen
eral George w. Wickersham in the fed
eral court at Kansas City, where he
appeared with Charles E. Hughes and
W. G. McAdoo to defend the constitu-
tionality of the farm loan act.
Mr.. Wickersham, who with Mr.. Nc
Adoo, appeared as attorneys for the
joint stock land banks, made very
clear the exact service which the fed
eral land banks perform and their
exact relation to the financial system
of the country. He also made clear in
what respects the joint stock land
banks differ from the federal land
banks.
Protecting Small Borrowers Rights.
Both types of banks federal and
Joint stOck) were created by the gov
eminent to provide aid for the agricul-
tural interests of the country. Mr..
Wickersham said that the government
with wisdom and singular comprehen-
sion, had reached out to take care of
every element of borrowers. Therefore
the federal land banks were created to
provide credit for small borrowers, and
the joint stock land banks were Gre
ated to provide a similar agency
through which the larger borrowers
among farmers might secure ample
funds without having to rely upon the
funds Which had been assembled for
the use Of the small borrowers, and
without danger of depriving the small
borrower of the very money which had
been assembled for his particular use.
He pointed out how in the case of
the establishment of federal land
banks the government had subscribed
TO the stock of these banks as a tenn
porary aid to the particular class OF
borrowers it was intended these banks
should accommodate. But, he said,
this was only temporary aid and that
the government had provided that the
stock which had been subscribed by
the government should be taken up
eventually by the borrowers so that in
the end, in a very short time, the small
borrowers will own their own banks,
that is, that the federal land banks
will be privately owned in the end
even as the joint stock land banks are
now privately owned.
Federal Banks for Associations.
1.-THE federal land banks do not lend
to individuals" said Mr. Wickersham,
"they lend TO organizations of borrow
ers, who together must desire at least
$4,000, and who must organize them
selves into a farm loan association,
and they must subscribe to per cent
Of the amount of the loan which they
seek, in the stock of the federal land
bank, as a condition to securing the
loan.
Provision is made that when these
banks are set up, If within a limited
time subscriptions are not made to the
clpNh ~ ONnCIO, Int SOftIu-
ment, through the treasury depart
ment, shall take up the minimum
amount Of stock with which they are
authorized to start business, to-wit,
S750,00000 Then, as they proceed in
their operation, as they loan to these
associations, and as these associations
subscribe TO their stock, by and by, by
the operations of the system, the stock
which the government has taken is re-
tired, and ultimately those banks come
Farmers to Own Banks.
"The federal government, as a stock
holder, will pass out, and if the sys-
TEN be successful, after a certain
length of time, the land banks will be
owned by the various loan associations
which are borrowing through the land
banks, and they will go ahead on the
impetus of private ownership.
Having thus provided a system
whereby this great scheme shall be
launched and become at once opera
i've anu iiAohCy Slldll DCNOlHc dNdll-
able to the farmers desiring it, the act
also provides that there be created a
different class of banks, namely, the
Joint stock land banks.
''Following the analogy of the ma
tional banks, the act provides that
from the outset, those banks shall be
organized by private individuals. The
stock shall be subscribed by private
individuals, and when $250000,00 is
subscribed, then the bank may begin
its operations.
Joint Stock Banks Controlled.
"Since the enactment of the law, 81
Of such banks have been organized in
different parts of the country, and they
are set forth in the petition. and their
aggregate capital is something more
than S50OO000.
snow despite the fact that those
banks are privately owned, from the
beginning of their operations, they and
their operations are subjected to con-
troll. They are invested with the same
powers, they are made subject to the
same liability as are given to and inn