Evening star., 1921-08-14


| IL business, through the process
of liquidation, which will re-
lieve to that extent the pres
ent financial stringency;
Giving ready cash to one-haif OF
the purchasing public so that they
can buy the materials they need for
| another year and thus making the
| wheels of industry hum;
That's what the Curtis-Neison act
recently passed, addins s25,C3o,00o 70
| the capital and drpcs::s of she fed
eral farm loan sys.e'1, means con-
gress and government officials say
that this legislation :s -he first big,
practical move by Uncle Sam to re-
store prosperity and to put busy
| into business.
1T means more to American busi-
ness than the tariff" says Asbury F.
Lever. federal farm loan commission
er, who as chairman of the House
committee on agriculture for eight
years knows as well as any man in
the country about the legislative end
of this most important basic industry.
Only Four Opposing Votes.
This measure. fathered by Repre-
sentative A. p. Nelson Of Wisconsin,
was passed by the House 315 to 4,
and. under the leadership of Senator
Charles Curtis of Kansas, the Senate
concurred unanimously.
The original capital of the twelve
federal land banks was too small to
permit a reasonable flotation of farm
loan bonds without adopting some
artificial machinery other than is
provided in the act. The farm loan
bonds are issued against accumulated
| first mortgages on farm. lands and
| under the theory of the law sufficient
of these farm mortgages or other ac-
ceptable collateral, such as govern
ment bonds or cash, must be in the
hands of the registrar of the district
before bonds can be issued.
1t has been found impossible to ac-
cumulate sufficient of these first mort
cages to float any considerable bond
| issue, and the capital stock of the
banks has not been sufficient to make
up the difference.
To illustrate: The farm loan board
has just completed the sale of $40.
600, 900 in farm loan bonds, back OF
which at the time of beginning the
sale was $20.000,000 of mortgages and
$2O,000,O00 of government certificates
! which the farm loan board borrowed
on the market. The s40.000.00o is
sufficient to run the system until
about the middle of August-that is
to date-because the board is loaning
at the rate of s12.0o0.oO to $4,000, ,000
per month.
The Curtis Nelson bill amends the
farm loan act by increasing the de-
pository privilege of the federal land
/ banks with the Treasury from s6.oo0.-
600 to $31.000.o0e. Without such
privilege the system would have
found itself within the last month
| without any available loanable funds
| for the reason that experienced bond
statesmen advised the federal authori-
ties of the unwisdom of attempting
another sale of farm loan bonds sc
shortly after the close of the pre-
| vious offering.
To Loan Treasury Funds
1t will hardly be possible to make
! another successful offering before the
first of October. they have advised. OF
at any rate until the last of Septem-
Der. In the meantime, without the
provisions Of the Curtis-Nelson act
the loan operations would have to
close for lack of money. Under the
| provisions of the act. however, the
| farm loan system is authorized to
| borrow from the Treasury not in ex.
cess of s31. 900. 900 to be used for loan.
ing purposes pending the bond sale.
| The federal land banks are availins
themselves of this privilege to supply
| their needs until another bond sale i.
made. When such sale is made the
| Treasury will be reimbursed and the
| system will utilize the remainder OF
the proceeds Of the bond sale for loan
ing purposes until it is exhausted
Then the deposit privilege will agar
! be called upon.
4 Tn otbar words tho rurtisNalSoy