The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-05-09
FARM LOANS
ARE ASKED
OF CONGRESS
Urge Revolving Fund of
$i00,O00,0O0 To Take
Care of Extreme Demands
for Money.
INDIANA FUND IS SHORT
PALLADIUM NEWS BUREAU

eral Farm Land Bank system, includ-
ing several Indiana associations, are
petitioning congress to provide re-
volving fund Of 500, 100000 to take
care of the extreme demands for
money which are coming in from the
rural districts.
The petitioners declare that the de-
mand for farm loans never was more
urgent. that taxes are going delin-
quent because the farmers cannot sell
their produce nor borrow money, and
that farm bankruptcy will be wide
spread if the relief asked for is not
granted.
The recent $40, 900, 900 bond issue of
the Federal Farm Loan bureau is
said to be wholly inadequate to pro-
vide needed funds.
AS an instance of the situation now
existing it is said that the Federal
Land Bank at Louisville, KY, which
serves the states of Indiana, Ohio,
Kentucky and Tennessee, cannot be-
gin to meet the demand of Indiana
farmers out of Indianas share of the
bond sale, which was $s25, ZOO. The
share of the entire territory served by
the Louisville bank, four states, was
s3,300000
Need More Money.
1t was stated that many times the
amount of Indiana's share of the bond
sale would be required to cover the
applications now on file from the 95
farm loan associations of that state.
Because of shortage of funds, it is
stated. the Federal farm land banks
are discouraging the organization of
new farm loan associations.
Only recently w II. Arnold of Ko-
komo Ind, was advised not to form
a new association in Howard county
until the present situation eases up.
To indicate the urgency of demands
for farm loans in Indiana it is stated
that applications totaling more than
$500, 900 are on file at the Louisville
Federal Land Bank from Marion and
Hamilton counties, although the share
of those two counties of the states
quota of $S25.000 is only $4,000
Bill Before Congress
A bill to provide a revolving fund
IF $50. 100000 is now before congress,
having been introduced by Represen-
-ative Nelson, of Wisconsin. The
petitioners hope to double the amount
and hasten its enactment.
The agricultural interests of the
country are also urging the passage
of another farmers relief measure at
the present session OF congress, the
McFadden- Kenyon rural credit and
multiple insurance bill
Briefly stated the purpose of the bill
is to make available to American
farmers credit facilities equal to those
enjoyed by industrial and commercial
interests. The multiple insurance
feature is joined to the credit meas
ure because the farmers insurance
policies are to constitute an addition
al security for his loans.
Say Credit Needed
Supporters of the bill state that a
more advantageous system of credits
is one of the great needs of American
agriculture. They point out that de-
posit banks have not been able to pro-
vide such a credit because sound
banking practice forbids that the de-
mand funds of depositors shall be tied
up in longtime loans. They say that
thirty, sixty or even ninety day loans
do the farmer little good for, unlike
manufacturer or merchant, the farmer
will make, as rule, but one turn
over OF his capital in a year 1t is
contended that experience has dem
onstrated that the average credit need
Of the farmer is for loan maturing
in about II months,
The McFadden-kenyon bill provides
that loans under the proposed system
shall be for production only. No
loans would be made under it for the
purchase of land or luxuries or for
any purpose except to further the pro-
cesses of production.
Criticism is Sharp
Sharp criticism has been directed
at the bill, however, because of its
provision that the initial capital for
the banking sysSm shall consist of
$4,000 900 advanced from the federal
treasury without interest. Critics as
sert that such action is Objectionable
in theory and dangerous as a prece-
dent
Explaining the McFadden-k Kenyon
bill R. c. Milliken, an agriculture
credit expert, says:
The bill proposes to create two fed.
eral corporations by two separate spe-
cial charters, namely a rural credit
society and multiple insurance league
Multiple insurance means all kinds
OF insurance. The rural credit society
will comprise one central bank, As
branches, one for each state, and any
number of community associations,
which are denominated communes in
the bill. The capital of the central
bank would be $4,000, 900 which would
be furnished by the government with
out interest. but a sinking fund is
created for its retirement The capi-
tai of the branches would aggregate
$2.400.O00. which would be furnished
by the big life insurance company
which accepts the federal multiple in
surance charter This branch capital
would become a guaranty against the
loss of the government, investment.
The stock of the communes would
have a par value of IS and would be
paid for by farmer members. This
commune stock would be another
guaranty against the loss of the gov
ernment's investment. and would also
be liable for the debts of the com.
munes of the several states in which
they are situated.
"A members borrowing capacity
would be proportioned to the amount
Continued on Page Twelve)