The Nezperce herald. (Nezperce, Idaho) 1900-1957, 1923-03-15

THE

n I1culIufeS merry -. W dllAcc.
& On the last day it was in session
q congress enacted the Agricultural
4 Credits Act. This act is designed tC
3 give the farmer the sort of credit he
3 needs to produce efficiently and mark
B ct in an orderly way the products OF
q the farm. 1t is an effort by congress
to meet need which has been felt
for at least fifty years. 1t furnishes
the basis for system of intermediate
credit adapted to farm conditions and
farm needs. Also it should bring about
reduction in the interest which farm
ers must pay for money borrowed
The act is divided into two parts.
In the first it provides government
agencies for handling agricultural
loans. In the second it authorizes the
organization Of private agencies I'M
der government supervision for max
ing loans ON livestock security and on
farm commodities on the way to MAX
ct.
The government loan activities will
be carried on in connection with the
Federal land banks. At the present
time the country is divided into u
districts, and in each of these districts
there is Federal land bank which
makes mortgage loans, these twelve
banks being directed by central Fed
leral Farm Loan Bureau in Washing
finn In aonuaofion with % oh of 4bauo
land banks there is to be established
an intermediate credit bank, located
in the same city with the land bank
and under the supervision of the Of
ficers and directors of the land bank. |
The Federal government supplies each
of these intermediate credit banks |
with capital of not to exceed $4,000 |
600. These intermediate credit banks
are authorized to discount farmers
notes which have been taken by banks
and other financial institutions, and
then carry such notes for a term OF
from six months to three years. The
banks may also loan direct to farmers
cooperative associations under condif
lions set forth in the act.
These intermediate credit banks
may issue debentures which will have
back 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 I
banks may not exceed by more than
one per cent the interest paid on the
iebenture issued, and the farmer who
oorrows must not be charged an in
crest rate of more than one and one
lalf per cent above the interest Il
'harged by the intermediate credit =
bank.
No doubt some time will be re =
ulred to get this machinery in smooth q,
working order. 1t will be Just like u
mlding up new business. 1t should
ot be very long, however, until the oi
enefits will be apparent and the ~
armer will find that he can borrow
eeded capital for period up to three 'r'
ears without having to pay an undu-
high interest rate, without having
renew his notes every ninety days
SIX months, and without being in Du
anger of having to sacrifice his
ops or livestock because Of a sudden no
nancial furry.
The second division of the act auth
ICES the organization, under a Fed
al charter, of national agricultural frs
edit corporations, these to be or.
nlzed by private capital. They will sto
under the supervision of the comp 80
oiler of the currency, just as are ~
her national banking institutions. lug
lev must have a can;to1 otoo1 - - rat
lst $25o,p0. They may issue col bro
eral trust debentures up to ten
les their capital and surplus. sSuch dire
'porations will probably be organ Bill
q IN the western states where the "
estock industry is important and tho
ere now cattle loan companies are n
operation.
n addition to the provisions of the non
designed to furnish the farmer is {
en- needed intermediate credit, GER }
changes have been made in the I
under which the federal land Bill
KS operate and in the Federal Re. his
re act. Provision for the estab. tbo
ment of the so-called permanent
of the twelve federal =,
banks is made by providing that 'ne
Q out of the seven directors for over
bank are to be elected by the Il
overs from the bank and three he
to be appointed by the Federal Star
Loan Bureau. The seventh di. --
'or, who will be president of the wazz
d, win be chosen from three per.
who have received the highest 4
nation vote for this position by 80
borrowers or stockholders of the =
10