Plentywood herald. [volume] (Plentywood, Mont.) 1908-current, 1929-07-04
MILLIONS SAVED IN
FARM INTEREST
SAYS BANK HEAD
Farmers Benefited By Federal
Land Bank Loans Says
Pres. Ehrhardt

Glasgow, June 24.-"The balance
sheets of literally hundreds of thou
sands of farmers who have secured
loans from the Federal Land Bank in
the last IL years show real and
tangible gain from such loans," de-
clared E. M. Ehrhardt, President of
the Federal Land Bank of Spokan.
which has loans outstanding Of $685.
100000 in Idaho, Montana, Washing
ton and Oregon, while discussing here
today farm credit problems with
representatives of local National
Farm Loan Associations through
which the Bank does business. "The
average reduction in interest rates
throughout the country is not less
than 2 per cent per annum, meaning
saving of approximately $25,000,-
600 each year to the 100000 borrow
ers from the Federal Land Banks in
the United States, fully 100000 Of
which represents the saving to farm
ers in these four northwestern states.
The bank has made for stability,
permanence and increased profit in
the farming industry"
Mr.. Ehrhardt stressed the fact
that the funds loaned are secured
mainly from the sale Of bonds backed
by the mortgages given by the farm
ers. Upon these bonds the farmers
of the Northwest pay approximately
$1,000,000 interest four times annual
ly, thus necessitating prompt pay
ment of installments up their long
term loans. The bank has been reor-
ganized within the last year and a
half and study made of the records
of loans in this territory.
Farm property in, certain localit-
les in the Northwest is unduly bur-
dened with tax and such land must
be excluded from credit privileges"
he declared. "Tax delinquency pre-
vents farmers from securing the
benefits of cooperative, long term
loan, for taxes are a first lien upon
property, and the banks mortgage
cannot take second place. This ap-
plies not only to prospective borrow
ers but to those having loans as we'll
Therefore, officers of National Farm
Loan Associations should make a
searching investigation Of the ability
Of borrowers to pay taxes and exclude
those upon which the burden is too
heavy"
"The Federal Land Banks are no
more government institutions than
are National Banks" continued Mr.
Ehrhardt. "The government has no
investment in either the Land Bank
of Spokane or the National Farm
Loan Association of this district The
mistaken idea that the government
owns the stock in these institutions
probably arises from the fact that to
aid the bank in starting it acquired
most of the initial stock, but this
long since has been repaid and the
stock is owned solely by the asso-
Citations. 1t does, however, supervise
the bank much in the same manner
that the Federal Reserve Board over
sees the member banks of the Federal
Reserve system.
"The fact that the bank retains
spread of only one per cent between
the rate of interest borne by it's bonds
and the rate charged borrowers def
initely limits it to it's principal func-
tion of aiding the farmes to pool
their mortgage credit SO as to obtain
the lowest possible interest rate on
borrowed long-te funds. 1t also
makes it imperative that farmers ad-
here strictly to their agreements to
pay their installment payments
promptly"