The Omaha morning bee. [volume] (Omaha [Neb.]) 1922-1927, 1923-04-07
New Credit Banks
Will Make Loans
Under 7 Per Cent
Federal Loan Board Expected
to Fix Interest Rate at S IL
Per Cent-Rules Are
Announced.


were given by the federal farm loan
board tonight that an interest rate
of 5i5 per cent would be charged on
loans made by the new intermediate
credit banks. At the same time an
nouncement was made by the board
OF the official rules and regulations
governing loans under the agricul-
tural credits act.
While the interest rate TO be
charged will be fixed by the credit
banks, subject to approval of the
farm loan board. farmers will be able.
if the indicated interest ratio is ac-
cepted, TO borrow money at per cent
or less. The law specifies that the
rediscounting agency shall not
charge in excess OF IL per cent for
handling the obligations.
Commissioner Lobdell said he ex-
pected some of the banks would be
ready to make actual loans by
April 20.
Rates Probably Uniform.
Although it is not necessary that
the rates of the 12 banks be uniform.
board members believed they likely
would be. Mention was made OF the
possibility that some rediscounting
corporations. such as the co-opera.
tives and othe1 associations made up
strictly OF producers, may not take
the full fee allowed them by law.
and 1t was pointed out that any such
fr. - INT
est charges to the farmers or livestock
growers.
The opinion was general that a rate
of 5h per cent, with the rediscount
charge added, would mean n material
reduction to the average farmer in
interest.
The board has decided "for the
present" 10 limit loans under the
credits act to livestock. grain. wool,
cotton, tobacco and peanuts as
staple agricultural products within
the meaning of the law. Loans on
dairy products. eggs. fruits and Vege-
tables are left 10 future determine
ton. but the exclusion OF those com,
modities. it appeared. IL not in
tended to be permanent.
viii Limit Loans.
The board. II was indicated, de.
sired to give further study TO rules
governing the handling of perishable
products.
A Limitation OF loans TO nine
months maturity also is prescribed
In the regulations as the maximum.
If aartft-ffN
to be taken by the credit banks was
fixed at not less than six months
from the date of the transaction
The credit banks will accept the re-
ceipt of any warehouse licensed and
bonded under the federal warehouse
act. but all other cases the wareholis-
ing laws and regulations of the state
controlling them must have the ap-
proval of the farm loan board.
The regulations provide also that
the paid-in capital OF agricultural
credit corporation must be $4,000
or more before loans may be granted
them on paper rediscounted for ad-
yances for agricultural purposes in
the first instance. When loans of
any kind are made on livestock, the
rules specify, n collateral agreement
must accompany the security offered.
so that additional security may be
supplied at any time the credit bank
so demands. Two examinations year.
ly OF all corporations and associations
seeking rediscounting privileges are
required by the regulations. examina
tion TO be conducted by national
bank or land bank examiners.
Securities Required.
II is also stipulated that any cor
poratlon submitting debentures Tor
rediseount with the credit banks must
deposit with the farm loan registrars
the securities upon which the debcn
lures are based.
Cooperative credit associations,
seeking redlscount privileges, viii be
required to file with the credit bank
OF their district complete data con
cerning their charter, plans OF opera.
tion and statements of its counsel
that II has full authority under the
laws of It's state TO act an n redls.
counting agency. All OF these viii
have TO be approved by the farm loan
board. in addition TO the local credit
bank before actual loan operations are
permitted.