Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-28
Washington Ticker
BY CLINTON COFFIN,
Associated Press Financial Writer.

To the other curious and novel items
of financial and monetary history made
during this year 1929 can be added one
fact probably best appreciated by Fed
eral Farm Loan Board officials now
meeting in Washington with Paul BeS-
tor, Commissioners of the system. This
has been a year when the politically
much-pitted dirt farmer speaking
in a national sense, has been able
regularly to borrow money lot cheaper
than has Wall Street. 1t was with the
object of getting agricultural short and
long term credits on something like a
basis of parity with the interest rate
rendered the business and stock specu-
lating world that Congress created its
lending system.
Mr.. Bestor's figures indicate that the
farmer borrower from the farm-lending
system has had a wonderful advantage
over the stock trades in recent months.
Though call money and time money
for stock loans have persiStently hung
for months close to 10 per cent, the
Farm Loan Bank officers feel that they
have been able to supply practically all
the mortgage money legitimately de-
manded by farmers at 6 per cent or a
trif1e less. Also in granting the inter-
mediate credit loans authorized by law
the system has some S68, 100000 sup
piled to farmers and farm co-operatives
in temporary advances on farm produce,
at rate running from 5i4 to 6 per
cent. These funds have all remained
available during periods when Wall
Street has been paying as high as 20
per cent for money, and being short
rationed at that. and have nothing to
do with the later accretions potentially
turned into the agricultural field by the
Just created Federal Farm Board.
Nevertheless, some observers think it
is possible that these high collateral
interest rates incident to stock activity
will have some effects on the Govern
ments farm credit system if they per-
sist much longer, though officials are
chary of discussing the prospect. TAX
ing round, rough survey of the situa-
ton, the farm loan system has, in its
IS years of functioning, got outStand-
ing $4,000 000,0 900 in farm mortgage
loans, obtaining the funds largely by
the sale of Government-guarante
bonds drawing Az per cent interest.
During the period of high interest
the board hasn't sold any new bonds,
and has been able to meet the demand
for new loans out of the payments
surplus capital held by its IL regional
banks. There seems to be some doubt
as to whether that supply of farm
mortgage money will continue to meet
the demand, and if the board has to
go into the bond market, depressed as
it is by prevailing high interest, it
might be forced to pay more for its
money, and forced, as well, to transfer
the higher charge to its farmer bor-
rowers. But that bridge isn't going to
be passed until it is reached, and Quite
apparently the Governments money
handlers are hopeful that before they
have to borrow anew for farm pur-
poses, interest rates will come down.
It seems to be the best guess of
railroad observers in Washington that
the coming session of Congress is going
to have far too much to do tariff and
tax wise to set out new legislation on
railroad consolidation or any other
transportation measure.
1T does not seem to us that there
is one chance in five that Congress will
pass any of the measures facilitating
railroad consolidation" j. D. Stafford
chairman of the board of the Railroad
Owners Association, commented in the
light of his information. If anything
is done on that problem this Winter
it will have to be accomplished by the
Interstate Commerce Commission under
present law. We think the bills sug-
gested would be very helpful, in that
they would allow the commission to
consider projects actually presented for
rail consultations without perfecting
a national plan affecting all railroads:
would enable Just treatment of minor
tiles. and would empower inclusion of
weak lines with strong ones as essential
to carrying out mergers. But I don't
see that Congress is likely to have suf-
ficient pressure from public opinion to
induce its act"
Congress, it appears. only takes up
rail legislation when carriers are dis
tressedofinancially or facing emergency
in labor matters. And the run of rail-
road earnings now being made public
shows a very considerable degree of ad-
yancing prosperity for carriers gen.
orally. while transport has not been in
terrupted In a serious sense by labor OF
other difficulties for seven years.
Just as Americans typically buy auto
mobiles on the monthly payment plan
so Javanese natives are now mortgagins
their earnings to get bicycles. The
spread of this country's installment
system to the Far East Is reported tt
the Commerce Department by trade
commissioner for the Dutch East Indies
who says that it is stimulating markets
for machines markedly.
Considering the Javanese earning
mower, commitment on q bicycle rep
resents about what the time payment
purchase of an auto does for an Amer
lean worker. The report estimated
bicycle prices in Java at $50 on time
and average Javanese annual wages al
$40.