The independent. [volume] (Elizabeth City, N.C.) 1908-1936, 1922-02-24
NEW FARM LOAN BANK MAY
BE A BOON TO FARMERS
Will Find Money For Farmers in Pasquotsnls
and Adjoining Counties Who Can Offer Inn
proved Real Estate AS Security
BY w. o. SAUNDERS

SOulQeTH lIuSl w., HCW ldllH
loan bank in this city, looks like
the only possible relief for hun
dreds of farmers in Pasquotank
and adjoining counties who must
have long time loans for the i'm
provement of their properties
and development Of legitimate
agricultural projects. l have no
patience wtth lot Of street talk
to the effect that the Southern
Trust Co. is a scheme to extort
heavy discounts from the unfor-
tunate farming class. l suspect
that much of this talk originates
with a lot of private money
lenders who have heretofore
been free to extort anywhere
from II to 10 per cent interest
from farmers compelled to seek
loans from them.
The Southern Trust Co. purposes to
act as sort of broker between the
desirable borrower in need of a long
time loan and investors who can be
persuaded that bonds secured by mort
gage on first class real estate is as
desirable an investment as government
securities. There are a lot of people
scattered about the country with money
they could lend on first mortgage real
estate, but they do not now put their
money to such uses because they don't
want to be bothered with the details
of looking up titles, recording deeds
and managing collections. These same
people will put out their money thru
an efficient trust company managed by
capable men.
The idea of the Southern Trust Co.
was born last fall when it became ap-
parent to the officers of the First q
Citizens National Bank of this city that
the farmers of this section could not
depend upon Federal Farm Loan Banks
for any considerable aid. To begin
with, back in 1918 the farmers Of this
section were promised great things
when the Virginia Carolina Joint Stock
Land Bank was organized in Norfolk,
Va. The farmers were told that the
Virginia Carolina Joint Stock Land
Bank would lend them money at six
per cent and that for this purpose the
Joint Stock Land Bank could get all
the money it. needed from the Federal
Farm Loan Banks. Then came a suit
challenging the arrangement between
the Federal Farm Loan Board and the
Joint Stock Land Banks. The Joint
Stock Land Banks suspended opera
tions for about a year, until the liti-
CATION was ended The Supreme Court
ruled in favor of the banks, but on top
of this favorable ruling came a deci-
sion from the Federal Farm Loan
Board to take no more paper from the
Joint Stock Land Banks. The Vir-
ginia- Carolina Joint Stock Land Bank
with its capital of S250,000 has failed,
thru no fault of its own, to do what
was expected of it.
Now it happens that the National
Banking Act will not permit national
banks to lend more than 25 per cent
of their capital and surplus on long
time paper. If this were not law. We
would have more bank failures than we
have now. We hear of so many small
banks failing these days simply because
they have their resources tied up in
paper on which they can not realize.
| Depositors need their money in these
days of depression and banks can't pay
depositors' checks if they have loaned
out all of their money.
AT tie same time it is to the interest
of the banks to see that every legiti-
mate enterprise in the community is
supplied with the money it needs. When
industry stagnates for want of capital
all other business, including the bank
ing business, stagnates too. In trying
to find a way to finance the local agri-
cllIuTdi luuustfs thc Il hsI N SieNShs
National Bank got busy last summer
and organized group of farmers In
the Pasquotank National Farm Loan
Association, to operate under the Fed
eral Farm Loan Bank at Columbia. s
lC. Applications for loans aggregatine
around $175,0OO were made to the Fed
eral Farm Loan Bank thru the Pas
quotank National Farm Loan Associa
ton, in due course. That was last
summer. Not one of those apDlica
tions has been put thru yet and it il
obvious that many a farmer waiting OF
the red tape of the Federal Farm LoaI
system would find himself sold out Of
starved ont before he ever got loan
1t also pans out that the exaction
of the Federal Farm Loan Bank ar
such that the average farmer can't ge
loan at ALL Some of the bigges
landowners and best farmers in thi
section with assets of $4,000 or NOR
have been turned down on application
for $4,000 loans. If they don't liv
on the land they are going to mort
| gage, or if they give their tenants NOR
than 80 per cent of their crops, or
: lot of other things, they can't &c
, money from the Federal Farm Loa
[ Banks. ~
/. And so that is where farmers an
lbankers fonnd themselves when tn