The producers news., 1920-01-02
FARMERS TO own
BIC LAND BANKS
George W. Wickersham Tells
How Federal Institutions
Will Be Taken Over.
TO BUY GOVERNMENT STOCK
Eventually the Borrowers Will Ac-
quire Complete Ownership Of Banks
Established Under Federal
Farm Loan Act.

Ns' ~0Qb NV
That the federal land banks and the
Joint stock land banks are important
supplements to the national bank SyS-
TEN and the federal reserve system was
emphasized by former Attorney Gen
eral George w. Wickersham in the fed
eral court at Kansas City, where he
appeared with Charles r. Hughes and
W. G. McAdoo to defend the constitu
tionality Of the farm loan act.
Mr.. Wickersham, who with .Ir. 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
ernment to provide aid for the agr!cul'
tural interests of the country. MIR.
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 tt
provide credit for small borrowers, anC
the Joint stock land banks were ere
ated to provide similar agency
through which the larger borrowers
among farmers might secure ample
funds, without having to rely upon the
funds which had been assembled fol
the use of the small borrowers. tnt
without danger Of depriving the small
borrower Of the very money which hat
been assembled for his particular use
He pointed out how in the case OF
the establishment Of federal lane
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 bank:
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 uI
eventually by the borrowers so that ir
the end, in q 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.
'sThe federal land banks do not lend
to individuals" said Mr.. Wickersham.
"they lend to organizations of borrow:
ers, who together must desire at least
$2O,OO0 and who must organize them.
selves into a farm loan association.
and they must subscribe to 5 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
stock by others, the federal govern.
ment, through the treasury depart.
ment, shall take up the minimum
amount Of stock with which they are
authorized to start business, to-wit:
$75O,OO0OO. 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
into the control Of their stockholders.
Farmers to Own eanl<s.
1.-THE federal government, as stock
holder, will pass out, and II the sys-
TEN be successful. after 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 60 ahead on the
impetus Of private ownership.
"Having thus provided system
whereby this great scheme shall be
launched and become at once opera
tive and money shall become avail
able to the farmers desiring it. the act
also provides that there be created
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 $2jO,OOOOO Is
subscribed. then the bank may begin
its operations.
Joint Stock Banks Controlled.
"Since the enactment Of the law. p
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 S5.IHHt,
"Now despite the fact that those
banks arr privately owned. from the
beri1.nin. their operations they anC
their operations are subjected to con
troll. They are invested with the saIns
powers. they are made subject to tbs
same liability as are given to and i'm