The Washington herald., 1921-08-13
WOULDFREEF FROZEN CREDIT
NU. S. BONDS FOR FARMERS
Congressman Millspaugh,
Rural Banker for Is
Years, Sees Way to Aid
Farming Without Raid
On U. s. Treasury.
By REP. FRANK C. MILLsPAUGH.
Of Missouri.

BY REP. FRANK C. MILLsPAuGH.
Of Missouri.
Having been a banker In the ag-
ricuItural belt of the Middle West
for twenty-five years. and havins
been Intimately associated with the
farmers and stockmen of that part
of our country-in fact, having
acted as the counselor and business
adviser to many Of them--l teei tnat
! can properly sense their needs ana
desires
To this. end have introduced In
the Congress a rural credits Din
,No. s5o3) which will, l believe
automatically control undue IN
iatiop and which will give to the
interests of our coun-
try a great measure OF RELIEF from
the present severe stringency.
Went Too Far.
II Is a well-known fact that
very small percentage Of the people
Of the agricultural districts OF our
country were cognizant OF the at
tractiye features of bond issues oil
any kind until our bankers. through
patriotic motives, began system
attic movement to educate all OF
our people, even the school children
in the matter Of purchasing LID
erty bonds to help our country IN
its time Of peril. ...
This movement extended much
further than II was INTENDED IL
should, with the result that 'he
local capitalists who had formeriy
invested in local securities ana
many OF them who had been con-
tent to leave their funds in the
local banks on time deposit, now
purchase all kinds of bonds ana
tax-exempt securities.
In fact, the situation grows more
stringent each day. as the locai
capitalists are now prone TO coliec'
all outstanding local securities as
they mature. investing their fuhds
in bonds which are locked in their
safe deposit boxes, and thus aug
menting the Overwhelming amount
Of frozen credits" which results
in severe stringency and stagnauoh
of business.
Digest Of Bill.
4 brief digest Of the provisions
of my rural credits bill follows
The owner of Liberty or Victory
bonds deposits them through hrs
local bank with the Federal fe
serve bank of his district. which
issues him a receipt therefor. guar
anteeine to him the return OF the
identical bonds within a stated
time.
The Federal Reserve bank enters
the bonds to the credit OF the loca'
hank for credit purposes under the
provisions of this act.
The local bank receives appiica
tons for loans for strictly agricui'
turaI purposes. to be secured elthei
nv collateral or by certain persona
security. and through co-operatioT
with the Federal Reserve bank er'
rects loans which are indorsed by
the local bank.
The Federal Reserve bank issues
Federal Reserve notes to the etNen,
OF so per cent OF the par value oi
bonds so deposited.
The Federal Reserve bank charges
a rate of interest not to exceed
sIs per cent per annum on such
loans. which earnings are to DC
applied as follows:
No Funds From Treasury.
The Federal Reserve bank re-
tains per cent per annum. from
which il segregates one-half OF
Der cent into rural credits guar
antv fund to meet any defaults
which may result from loans made
under the provisions of this act.
The local hank receives PEI
cent per annum. out Of which II
paws to the owner of the bonds
one-fourth of ! per cent per annum
for the use of the bonds.
This act differs from other pro-
posed legislation in that il does
not take any funds from the Treas
ury OF the United States: it requires
no appropriation. and in that II
uses the frozen credits whica
caused the stringepcy. as an agency
to alleviate the strIngency.
Thomas C Atkeson. the repre-
sentative of the National Grange
in Washington. after careful con
sideration Of the measure, states
that he considers It meritoriou'
measure and fundamentally sound.