Evening star., 1921-08-14
CASH FOR FARMERS
+ TO HELP ALL TRADE
Additional Funds for Federal Farm Loar
System Expected to Put New Life
Into Business.

ACT makes certain SO long as bond,
can be sold the continuous. uninter
rGpted loaning operations of the fed
eral farm loan system. II is estimated
that there is demand in this coun.
try for such a character of investmen.
as our farm loan bonds to the exten,
of 5000. .0O0. 900 year. The machiner,
OF the farm loan system. operating
normally, is capable of putting thi,
amount of money annually into tn,
hands of the farm borrowers.
Bfhson b.Ilars n Yea.
Assuming that u 3. facts as. war.
fanted, ana rea asoninG upon this ,neor,
shat 81 Of ',ioney ri'i liquidaf4 IS o.
ess-and this is a conserva.
tive estimate-the conclusion follow,
that the enactment of this legislation
| by and large. during the course o,
years, should result in the liquidation
OF about billion dollars of debts an.
| nually.
| Ihe Importance of the provisions @,
| this Dill are emphasized by the report
OF the census bureau. showing a very
| large increase in the farm mortgag.
Indebtedness of the country. Tn.
census bureau finds that the mortgag,
oepts OF American farmers more thar
doubled in the decade between 1916
and 1920. The increase in mortgag.
| charges against farms owned by their
operators was 1925 per cent, or fror
/ s1,720.172.s51 in 1910 to s4.gl2.7ll,el;
in 1920. The mortgages amounted ir
1920 to 29.1 per cent of The value OF
| the farms against debts of 21.3 pei
cent of the values in 1910. The values
of the farms in 1920. the report show
ed. were s13.722.729.61o. The average
i amount of mortgage debt per farm
for the United States in 1920 wa.
s3.a61 against s1.7I5 in 1910. Th.
values of farms increased liz per
cent
The farm loan act permits money
borrowed through the system to be
used in liquidation of mortgages upon
| farms IL such mortgages were made
for agricultural purposes
! Forty-nine per cent of the entire
population of the United States u
agricultural. The provisions of the
I SQf 3NclSoH dCl. UE continuing Ine
operations of the farm loan system,
starts the process of liquidation on
the part of the people. 1t lets one
half of the entire purchasing public
go into the market and buy for cash.
Those who have borrowed money
from the small local banks are able
to pay ii back, and the local banks
fpt
other deserving channels Of industry
that previously had to be denied
because the banks had no more money
to lend.
Unfreexin& Frozen Credits.
The money derived through the
| farm loan system is going to do more
/ to unfreeZe the frozen credits of the
country banks than anything done in
the way of legislation or even sug-
gested. the federal officials say 1t
allows the country merchant to be
paid. He. in turn. can pay the whole
sale merchant, who in turn will pay
the banker in New York, and the
| liquidation will ebb through the
whole sea of International finance
| Within the next eighteen months
the federal farm loan system will
loan from s250.00o.O00 to s275. 100000
actual money.
The terms of repayment are an inn
portant feature. Indebtedness through
the farm loan system is unlike other
systems except the building and loan.
Debts can he made with more or less
impunity because of the amortization
, feature of repayment. The borrower
is required under the terms of the act
to make annual or semi-annual pay
ments of interest on the mortgage as
we'll as principal. the loans running
about 331s years. and the rate of
interest cannot exceed under the law
6 per cent
The amount already loaned by the
twelve federal land banks is $780,
575.s73. The joint stock land banks.
which are private corporations work
| ing with the farm loan system. have
loaned an additional S7s.255,962.