The Hartford republican. (Hartford, Ky.) 18??-1926, 1921-08-26
CUT BANK PROFITS
ON FARMERS LOANS
by 23f Ia 20 House Raises Rate To
Market Buyer hut Not
To borrower.

Washington. Aug 2C.-~y vote
Of 234 TO 20 the Republican House
has put thru a bill expediting farm
credit by increasing the market in
terest on farm loan bonds from to
3 p per cent without raising the rate
of interest to the borrower.
Representative Strong, of Kansas,
in urging the passage of the measure,
said:
This bill simply increases the rate
, at which the farm-loan banks and
| jOint-stOck banks may issue their
bonds for two years. II does not in
crease the rate to the farmers. 1t
only lessons the profit of the banks,
but enables them to sell their bonds
and obtain the money to loan the
farmers of the Nation.
Ever since this farm-loan system
passed this Congress there has been
a determined opposition to it. 1t
has mostly come from the agents
bankers who are interested in the
farm-lOan mortgage business. They
have an association, and thru that as
ISOLATION they attacked this farm-loan
system in the courts, and they car
ried II TO the courts, and they carried
II to the Supreme Court of the Unit
ed States and tied it up for two years.
They caught the farm-lOan banks and
the jOint-stock banks with a lot of
commitments; that is, the farm-loan
banks and the jointstock banks had
taken applications for mortgages and
agreed to make them, and in many in
stances had placed the mortgages on
record. and had no money to meet
the commitments with. Congress
voted S2O0.OOO,OOO to relieve that
situation of the farm-loan land banks.
but the joint-stock banks had no such
relief.
They have been borrowing of the
banks thruout the country at and
and 8 per cent to get the money to
meet their commitments. The SUI
preme Court of the United States hav-
ing declared the law legal upon which
the banks are founded. they now
come to Congress and ask us to in
crease the rate at which the law per-
mits them to issue their bonds from
5 to 5 y per cent.
"Of all the tax-free bonds issued
thefarm-loan bonds are the only ones
that are thus limited as to the rate
of interest. Why should they be so
limited? And when the Government
is offering taxfree certificates at ) q .
per cent, thereby making it impossi- |
bic for the joint stock land banks to
float their bonds at 5 per cent, wig
ii is not just and right to pass bill |
to raise the rate in order to let them
sell their bonds and get the money
they need to meet their obligations
and make new loans?
Whom will ii benefit? Not alone
the farmers, because many of the
banks throughout the West and thru
out the East also made loans to these
joint-stock banks in order to enable
them to meet their commitments,
and this raising of the rate of inter
est will enable them to sell their
bonds and provide the funds to re-
turn to the banks of the country the
advances which they have made,
thereby giving them that much relief.
It will also provide relief for the
farmers who are now having their
oans foreclosed. because the loan
and large estates now have
more attractive loans offered them at
higher rates OF interest and will not
'enew at old rates of interest or make
lew loans at reasonable rates. There
S need now for relief for farmers
If the West.
at seems to me that the objection
o the tax-free feature of these bonds
comes with very poor grace from the
nen who make that objection to the
,assage of this bill. There are $17.-
100 900 900 Of tax-free J bonds now
Ield in the United States, and of this
asst amount only $45O,OOO,O 900 have
een issued by the farm-loan system.
seems to me this is certainly bad
ime to cry out against the issuing of
ax-free bonds when the farmer is
skiing for less than per cent of the
otal issue of tax-free bonds"