Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1921-11-12
.HERNDON STATES
SCOPE Of LOAN
AGENCY ACTIVITY
Chairman of Local Finance
Corporation, Gives Out
information As to Regu-
lationS and Provisions.

ASSOS~NtNN
standing of the nature and admin
istration of amendments to the
war finance corporation act includ-
ed in what is popularity known as
the agricultural relief act" the
following outline of the new meas
ures has been approved by J. B.
Herndon, chairman of the agricul-
tural loan agency:
The recent amendments author
iZe the war finance corporation to
snake loans for financing exports of
staple agricultural products and
for agricultural purposes in gem
eral.
The term Agricultural purposes"
has been specifically defined by
the corporation to mean "any pur-
poses connected with the growing,
harvesting, preparation for market
and marketing of agricultural
products, including the breeding,
raising, fattening and marketing of
livestock"
The fundamental purpose of the
amendments is to provide for fl
nancing the farmer and livestock
man, but in practical operation
loans are not made direct to indi-
vidual producers. Banks, trust
companies and cooperative asso-
Citations advance money to the pro-
ducers and in turn may borrow
from the war finance corporation.
Who May Borrow.
Different regulations In the
amendments govern loans for agri-
cultural purposes and those for
financing exports Of farm products,
Provisions dealing with advances
for agricultural purposes authorize
loans to:
n, ANY bank. banker or trust
company that has itself made adj
vances to producers for agricul-
tural purposes as defined by the
war finance corporation, or has
discounted or rediscounted nego-
table paper issued for those pur-
poses.
The term "bank, banker or trust
company has been defined as in
Guiding loan associations that make
advances for the permitted pur-
poses. The war finance corporation
is encouraging the formation of
loan associations in districts In
which banking facilities are made
ouate to meet the requirements of
farmers and livestock men.
b. ANY cooperative association
of producers that has itself made
advances to producers for agricul-
tural purposes as defined by the
war finance CORPORATION. or has
discounted or rediscounted nego-
table paper issued for those pur
noses.
In effect. regulations governing
loans to banks. trust companies,
loan associations or cooperative
essociations are as follows:
1 The amount borrowed from
the war finance corporation may
not exceed the unpaid balance of
loans made and agricultural paper
held bv the borrowing bank. trust
COMPANY loan association or CO.
operative association.
The borrower must give a
prornissorv note or other instru-
ment IMPOSING upon him an uncon-
ditionaI and primary obligation to
repay the loan at maturity.
3. Advances "shal1 he fully and
alternately secured in eacb instance
Inv indors ment guaranty pIedge
or otherwise"
4. The board of directors of the
war finance corporation is en-
nowered ia fly the rate of interest
on advances made by the corpora
tion and n hank. banker. or trust
companv borrowing from the cor
noration on the basis of loans made
for AGRICULTURAL nurnosos NAV NOT |
charge on sucb loans q rate Of in |
terest more than ner cent in ex-
cess of the rate charged bv the cor
poration.
(This per cent was determined |
1Inon at a rate that fairly repaid |
fbe ban1, for tbe cost of handling
the advance to the farmer or live
stock man. the risk taken. and so
IN
The war finance corporation
NAV mako advances for n neriod of
one wear and an advance NAV be
extended for NOT TO exceed three
Years from the date of the origi-
nal loan. The corporation may
make loans NOT exceedine in the
aqpregate Al 600 900 600. up to
TvIy / 1909
III must he understood that the
an,endment Of the war finance cor
poration act is wholly an emer-
gencv measure, designed to meet
shnormal conditions. It is not con-
terminated that the war finance
cornoration shall carry these agri-
cllturaJ loans indefinitely. Bor-
ro1ers from tha corporation will
have To repav these loans at the
and of three yaars ar the latest.
nnd loans for apricuItural purposes
remaininp unliauidated at that
tive will have 70 he carried bv the
ian i hanks trust companies,
ioa, associations or co-operatiye
a Csc tionsS
T,rocedure
Tn order that advances to banks
ona trust comnanies under this act
nav he administered with greater
facjI;tv and bv men familiar with