Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-20
FARM LOAN BANKS
LEND S335,195,351
More Than $50 Financing In
StitutionS Granted Credits
by Federal Agency.

The IL Federal intermediate Credit
Banks have been in operation little
more than 7 years, and during that
period up to August 81, this year, they
discounted farmers notes amounting
to 1895, 195, 35l for more than $50 fin
ancing institutions and renewed loans
aggregating $165, 639,874, making a
total of S500.835 225. These banks also
have loaned to more than 80 cooper
alive marketing associations, including
renewals, approximately $540,3 ,261.
These figures are cited in new pam
phlet just issued by the intermediate
Credit Banks, showing, in part, the
service which these institutions have
been to agriculture to date. The out
standing loans at this time amount to
$123, 100000.
The new pamphlet will be used in
answering the many inquiries which the
Federal intermediate Credit Banks and
Federal Farm Loan Board receive con-
corning the functions of these Federal
banks. Although the pamphlet covers
only IL pages, it discusses the organl-
cation OF live stock loan companies ana
agricultural credit corporations, tells
how they may discount paper with the
Federal intermediate Credit Banks, dis
cusseS the relation between local COM
mercial banks and intermediate Credit
Banks when the former wish to dis
count paper with the latter, details
step by step what the farmer has to
do to get a loan and also details the
facilities offered to farmers Coop
erative marketing associations wishing
to obtain loans on their warehouse
staple agricultural commodities.
agricultural Paper"
1.-THE note of the individual farmer,
offered by local institutions for dis
count to the Intermediate Credit Banks,
must be what is known as agricultural
paper; that is, the proceeds must be
used for an agricultural purpose, or the
raising, breeding fattening or market
ing of livestock" says the pamphlet.
The law does not permit Federal In
termediate Credit Banks to make loans
or advances to individuals or to dis
count paper for individuals directly
ANY farmer or livestock producer VINO
desires to avail himself of the credit
facilities of a Federal intermediate
Credit Bank should apply to an agricul-
tural credit corporation, live STOCK
loan company, or banking institution
doing business in his locality which has
the privilege of discounting paper with
or obtaining loans from the Feoeral
intermediate Credit Bank. A state OF
national bank, trust company, savings
hank. or similar institution handling
eligible agricultural paper may pro-
vide agricultural credit for its COM
munitv by submitting such paper to the
Federal intermediate Credit Bank
which serves the district in which such
financial institution operates. In local.
tiles where existing credit facilities are
inadequate, agricultural credit corpor-
atoms and live stock loan companies
may be formed. When properly organ
lied with adequate paid up capital ana
managed by competent personnel SuCh
corporations may be granted the pLlEn-
eye of discounting with or obtaining
loans from the Federal intermediate
Credit Bank serving the district IN
which they are located.
persons interested in the formation
of an agricultural credit corporation OF
live stock loan company ShouIo nrsI
make a preliminary survey OF the terri
tory in which the proposed corporation
is to function and estimate the amount
of acceptable agricultural or i've STOCK
paper which the corporation Is nKey
to be called to handle, so as 10 oe-
termine the probable extent OF It's oper-
ations and the amount of capital nee
essary for that purpose. In order tnat
such an institution may operate saIely
and economically it must have adequate
capital and competent, experienced per-
sonnet and its territory should be nm
tied to an extent that enables 1t to In
spect and supervise its loans properly
and collect them without UNIQUE eX-
pense. The amount of paper which may
be discounted varies from three to eight
times the paid-in and unimpaired capl-
tai of the discounting institutions.
Loans to CO-operatives.
ain addition to discounting agricul-
tural paper for, or making loans Sc
cured by such paper to, State or Ma
tional banks, agricultural credit cor
porations and similar financing instltu-
lions, the Federal intermediate Credit
Banks make loans to cooperative as
sociations composed of persons engaged
in producing. or producing and mar
keting, staple agricultural products.
The notes of such cooperative assocta-
tions must be secured by warehouse re-
ceipts or shipping documents covering
staple agricultural commodities. The
amount which bank will lend in any
case depends upon the character OF the
commodity offered as collateral, the
MANAGEMENT and financial condition of
the association, the marketability of
the product and other factors. In no
event may the banks lend to such asso-
Citations more than rs per cent of the
market value of the products pledged
as collateral.
The following agricultural commodi-
ties have been approved by the Federal
Farm Loan Board as a basis for loans
or advances to cooperative marketing
associations: Rice. flaxseed, wheat. corn
and other grains; hay, cotton, wool and
mohair, tobacco: peanuts and other
nuts, brookcorn, beans, alfalfa. red top
and sweet clover seed, cheese, canned
fruits and vegetables, including cold
pack fruits; raisins, prunes and other
dried fruits; olive oil, extracted honey,
powdered and evaporated skim milk
sugar Craw and refined), maple strip.
The Federal Intermediate Credit
Banks have ample funds to meet the
demands made upon them by local lend
ing institutions and farmers co-operat-
ing marketing associations as they have
a capital of $60,0O0,000 and can sell
debentures to secure additional funds to
loan to the extent of 10 times their