Evening star., 1929-06-10
Washington Ticker
BY the Associated Press.

BY the Associated Press.
Congressional investigation now i'm
pending as to the Federal farm loan
system is serving to bring into the light
of publicity an institution which, in
spite of its more than $4,000, ,000, 900 OF
assets and its Nationwide scale Of Or
ganization, has functioned Of late in a
good deal of obscurity. Both officials
of the Farm Loan Board and leaders
Of the congressional criticism make
haste to indicate the recent demand
for inquiry has little to do with the
validity of farm mortgage lending by
the system and does not operate to
challenge the integrity Of the immense
quantities Of mortgage bond investments
outstanding in the hands of the In
vesting public.
What seems to inspire the protest, in
the view of both the interested legis-
latorS and board members, is the in
creaSing dissatisfaction on the part OF
a rather large group OF people who are
stockholders in the complex group of
| corporations more or less linked to form
the system. Dividends on their hold
| ings have been limited and prospects
for the future are less bright than
hoped.
at is true that business men of my
| State interested as stockholders in
| Joint stock land banks were first to
raise the questions about the system
which have taken up," explained Rep
reSentative Louis Cramton of Michigan,
who has pending a resolution for the
inquiry. 1T Is my feeling that the
board has failed to fulfill its functions
and that a situation is growing up that
very seriously needs attention. have
asked the rules for a hearing on the
proposal and am ready to bring forward
witnesses who have knowledge of the
facts.
1T is possible that the House leaders
Will not feel that the matter can be
taken up this Summer, but notwith-
Stnding the resolution for investigation
Will remain alive. And we shall insist
that attention be given 1t at the regular
session"
The board itself is now in a stage of
transition, Paul Bestor, former president
OF the st. Louis Land Bank, having Just
taken the chief executive Office, sue
ceeding Eugene Meyer, jr.; but in taking
cognizance of the investigation demands,
its members are inclined to believe that
protests arise from conditions that are
in fair way to be bettered as a result
OF changed board policies in the last
TWO years. Ihe somewhat complex
organization of the system includes IL
regional and federally conducted land
banks, which have lent about $780,
100000 on farm mortgage paper, and
some SO joint stock institutions, private
ly owned, which have outstanding loans
Of $639,000000 at the last report.
Three of the so joint institutions are
in the hands of receivers, and Mr..
Cramton says he would like to know
more about the condition of some of
the others. None of the IL regional
banks is questioned but every farmer
borrowing from them Is obligated to
take 5 per cent of his loan in the form
of securities originated by the system,
either in the regional bank or In one
Of the 1000 neighborhood loan asso-
Citations which administer the actual
loaning. Rather small proportion of
this stock has borne dividends. and the
boards policy has favored the use of
earnings to build up reserves rather
than to furnish income.