The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1920-05-20
Fifty Millions of Dollars Badly
Needed by Farmers Held
Up by Suit and Delay.
PRIVATE BANKS HOSTILE
Have Suffered Because Govern
ment Loans Were at Lower
Interest Than Theirs.

/
need of cash to finance purchase OF
land, live stock, implements or seed, or
otherwise to extend their operations
this spring. will not be able to negotiate
low-interest, long term loans through
Uncle Sans farm loan bank system.
They will have to deal, instead,
with the private farm mortgage
| banker, against whose arbitrary
terms and high interest rates the
federal farm loan system was de-
signed to protect them.
Ihe reason is that these private
banking interests, naturally hostile to
government loans. have the whole fed
eral farm loan system tied up in a suit
! contesting the constitutionality of the
tax-tree provision on farm loan bonds
The case is now before the su-
prene court for decision. IL was
argued IN January, but late in
April the court asked that IL be
re-arsued. The court will adjourn
FOR its summer recess on June z,
and as the docket up to that date
rs crowded with cases previously
assigned, there will be no chance
! FOR re-arsument of this case until
after It reconVenes next Septem-
Der.
Ine result is there can be no farm
loan bonds issued in the meantime. and
without the sale of bonds there is no
money provided from which TO make
loans except such as may be forthcorn-
ing from private interests favorable to
the system.
Applications for some $50, 1000. 900 in
farm loans are now pending. Perhaps
one-third of these can be taken care
fhrn1reyh he
ly interests. The remainder will have
to wait.
The result will be higher interest
payments and less advantageous terms
for those farmers who turn to private
sources for their loans. and a LESSEN
ing of production and consequent high
er prices for foodstuffs 10 the extent
that farmers who would extend their
operations with the assistance of low
rate government loans decline to do
so on high interest, short money
from private sources.
The real reason for the request for
re-argument of the suit before the su-
preme court, it is Understood, was that
the court was deadlocked on its de-
cision on the facts presented.
Justice Brandeis, friend of the farm
loan idea, invested in bonds of the
system when it was getting under way.
This ownership of bonds, the court
agreed, disqualified Brandeis from
joining in the decision as to whether
or not they are tax free, and left de-
cision TO the remaining eight mem
bers of the court. They are said to
have divided evenly, to 4.
One proposed solution. to enable the
banks to operate pending the decisionl
OF the court, is for congress to au-
thorize and advance of money suf0-
clent to cover loans until the deci-'
sion is rendered. Congressman Ferris
and Morgan of Oklahoma, and Platt of
New York, already have introduced
bills providing a treasury loan of s1OO.-
100000, and an effort will be made to
rush these through the banking and
currency committee.
The one definite thing in the whole
situation is that the farmer in need
of money, is left up in the air" until
either congress or the supreme court
acts.
Just what the farm loan system
means to the American farmer is indf-
Gated by the statistics covering loans
made in the three years OF it's opera
tion.
From standing start in March. 1917,
the system has advanced more than
s3S5,O00,000 to farmers at and 5I-2
per cent interest. repayable on an
basis at / per cent an
nually for 80 I-2 years.
Private mortage bankers, accus-
TONED to receiving from to 10 per
cent for their farm loans, naturally
have suffered. And they intend to
make hay while the sun shines this
spring by charging all the traffic will
bear during the period the federal sys-
tenn is tied up-and to keep IL tied I'D
as long as possible.