San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-03-14
THE RURAL CREDITS ACT WILL
HAVE STABILIZING EFFECT ON
us. INDUSTRY, WALLACE SAYS
Livestock Raiser and Farmer Will Be Greatly Bene-
fitted and Agricultural Production and Marketing
Will Be Equalized; One of Most Important
Measures Passed by Last Congress.

Washington, ID. c., March A.
Stressing the particular value of the
Rural Credits act, passed by Congress
on the day of adjournment, to live
stock and farming interests, Secretary
Henry C. Wallace, in statement,
expressed the belief that it will have
stabilizing effect on industry gem
orally. This statement results from
A careful analysis of the bill mace 9y
| the secretary, and he has already
taken steps to put the credit maenln-
Jerry thereby provided, into opera
|tion. G..
Discussing the bill at length Sec
Rotary Wallace says:
son the last day it was IN session
congress enacted the Agricultural
ICrcdits Act. This act is designed 10
give the farmer the sort of credit ne
lnocds 10 produce efficiently and mar
G.>..in an orderly way the products
[of the farm. 1t is an effort by Con-
rress TO meet a need which has been
|felt for at least 80 years. The act
NAV not be perfect. Quite POSSIBLY
texperience will show the need OF
amendments from time TO time. But
II furnishes the basis for n system
Inf intermediate credit adapted to
Harm conditions and farm needs. Also
liz should bring about reduction IN
tbe interest which farmers must pay
for money borrowed.
Divided In Two Parts.
1.-The act is divided into two parts.
I'm the first, it provides government
agencies for handling agricultural
|loans. In the second it authorizes
the organization of private agencies
under government supervision Tor
making loans on livestock security
and on farm commodities on the way
Ito market.
"The government loan activities
will he carried on in connection with
the federal land banks. At the
present time the country is divided
into twelve districts. and in each OF
these districts there is federal lana
bank which makes land mortgage
yloans. these twelve banks being direct
ed by central Federal Farm Loan
bureau in Washington. IN connection
with each of these land banks there
lis to be established an intermediate
credit bank. located in the same clty
with the land bank and under the
supervision of the officers and dlrec,
tors of the land bank. The fedcral
government supplies each of these IN
termediate credit banks with capt.
tai of not to exceed S5,000,000. These
intermediate credit banks are author
lied to discount farmers notes which
l,ave been taken by banks and other
Financial institutions, and then can
carry such notes for term OF from
six months to three years. The banks
ray also loan direct to farmers CO.
Operative associations under conditions
set forth in the act.
May Issue Debentures.
"These intermediate credit banks
NAV issue debentures which will have
kSn of them the farmers notes which
the banks have taken. The idea is
that these debentures may be sold to
people who wish safe investment.
They are exempt from taxation, Just
as the bonds issued by the federal
land banks are exempt. The interest
charged by the intermediate credit
banks may not exceed by more than
| Der cent the interest paid on the
rIcbentures issued. and the farmer who
borrows must not be charged an in
terest rate OF more than l IL per
cent above the interest charged by
the intermediate credit bank.
No doubt some time will be re-
1uired to get this machinery in smooth
working order. 1t will be just like
building up a new business. ii
should not be very long, however,
until tho benefits will he anparent
and the farmer will find that he can
borrow needed capital for period NJ
to three years without having to pay
an unduly high interest rate, without
having to renew his notes every ~
days or six months. and without be-
ing in danger of having to sacrifice