The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1923-03-15
FARM AND STOCK
LOAN ACT PASSED
Statement of New Laws Provisions
to Aid Ranch and Stock Men
Made by Henry c. Wallace
Secretary of Agriculture


On the last day it was in session,
congress enacted the Agricultural
Credits Act. This act is designed to
give the farmer the sort of credit
he needs to produce efficiently and
market in an orderly way the prod
ucts Of the farm. 1t is an effort by
congress to meet a need which has
been felt for at least fifty years.
The act may not be perfect. Quite
possibly experience will show the
need of amendments from time to
time. But it furnishes the basis
for a system of intermediate credit
adapted to farm conditions and
farm needs. Also it should bring
about a reduction in the interest
which the farmers must pay for
money borrowed.
The act is divided into parts. In
the first, it provides government
agencies for handling agricultural
loans. In the second it authorizes
the organization of private agencies
under government supervision for
making loans on livestock security
and on farm commodities on the
way to market.
The government loan activities
will be 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 a
federal land bank which makes land
mortgage loans, these twelve banks
being directed by a central Federal
Farm Loan Bureau in Washington.
In connection with each of these
land banks there is to be established
an intermediate credit bank, located
in the same city with the land bank
and under supervision of the Off
GERS and directors of the land bank
The federal government supplies
each of these intermediate credit
banks with a capital of not to ex-
ceed $5,000,000. These intermedi-
ate credit banks are authorized to
discount farmers notes which have
been taken by banks and other in
stitutions, and then can carry such
notes for term of from six months
to three years. The banks may also
loan direct to farmers cooperative
associations under conditions sci
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 IT, people who wish a
safe investment. They are exempt
from taxation, just as the bonds is
sued by the federal land banks are
exempt. The interest charged by
the intermediate credit banks may
not exceed by more than one pei
cent the interest paid on the de.
bentures issued, and the farmer
who borrows must not be charged
an interest rate of more than one
and one-half per cent above the in.
terest charged by the intermediate
credit bank.
No doubt some time will be re-
quired to get this machinery in
smooth working order. 1t will be
just like building up a new bust.
ness. 1t should not be very long
however, until the benefits will be
apparent and the farmer will find
that he can borrow needed capital
for a period up to three years with.
out having to pay an unduly high
interest rate, without having to re-
new his notes every ninety days OF
six months, and without being in
danger of having to sacrifice his
crops or livestock because of O sud
den financial furry.
The second division of the act
authorizes the organization, under q
federal charter, of national agricul.
tural credit corporations, these to
be organized by private capital
They will be under the supervision
of the Comptroller of Currency
just as are other national banking
institutions. They must have a
capital stock of at least $3.50, 900
They may issue collateral trust de-
bentures up to ten times their capi.
tai and surplus. Such corporations
will probably be organized in the
western states where the livestock
industry is important and where
cattle loan companies are in opera
ton.
In addition to the provisions OF
the act designed to furnish the
farmer much needed intermediate
credit, certain changes have beer
made in the law under which the
federal land banks operate and in
the Federal Reserve Act. Pro.
vision for the establishment of the
so-called permanent organization OF
the twelve federal land banks is
made by providing that three out
of the seven directors for each
bank are to be elected by the Dor.
rowers from the bank and three
are to be appointed by the Federal
Farm Loan Bureau. The seventh