Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-16
FARM RELIEF MORATORIUM
HELD DOOMED TO DEFEAT
Interest on $l,6OO,OOO,OOO Debenture
Bonds of Land Banks Stands in
Way of Legislation

not practicable, say agricultural leaders,
but in their opinion it is the most thai
can be expected to result from the com.
ing agricultural agitation.
So far as Government stock in the
IL Federal Land Banks is concerned. n
has been reduced from the original
50 ,0O0, 900 advanced from the Federal
Treasury in 1918 70 a mere S2S7. 73s
And farmers. through the agency OF
more than $500 farm loan associations
nave an approximate S66, 600 900 in
vested in the stock of the banks, or an
estimated $685. per cent OF all land
bank stock.
The efficiency OF the Federal Land
Banks and the Joint Stock Land Banks
IN meeting the needs Of agriculture, or
that portion of 1t that stands In need
OF credit, Is another argument that Is
advanced by farm experts as insuring
the defeat OF any moratorium legis-
iation that may be advocated. Before
the Federal farm loan act became fully
operative, according to Louis j. TabeT
master OF the National Grange, interest
charges in the South and West varied
from Z to II per cent on farm mort
cages. and in the North and East the
charges ran from to per cent, A.
result of the passage of the act, these
charges have been stabilized at an ap-
proximate per cent throuRhout the
country, and Wall Street itself is au-
thority for the statement that its opera.
ton has saved the American farmer
$3.50 600, 900 to $l80, 900 ,00O annually IN
interest charges and commissions alone
Payments Met Promptly.
In addition is the further advantage
in the longtime amortized MORTGAGE
upon which the borrower is compelled
to reduce his loan slightly every six
months. He may allow the mortgage
TO run Tor a 3-year period or he has
the option OF making payments in who'll
or in part after given period. This
say agricultural leaders. has made foi
thrift and Stability--and they Prov
their statement by pointing to tn,
promptneSs with which the farmers a,
whole have met their payments a.
they fell due.
Further evidence OF the soundness Of
the system lies in the satisfactory mar
ket that its bonds enjoy, say farm
leaders. Banks, OF course. do not lene
their own money, funds available fol
borrowers come from the purchasers o.
bonds, and II there were no bond buyers
there would be no farm loans. The
system has operated to the double ad.
vantage of both borrower and investor.
In that the latter has a safe and de-
pendable type Of security and the
farmer is enabled to obtain funds at
low interest rate. with ample time ir
which to retire his Indebtedness.
Appraisal Values Decline.
On the other hand. farm leader.
point to the fact that the current de,
preston has operated TO reduce tn,
appraisal value Of property offered A.
security for loans, thus making fund,
dimcu1t to obtain. Out Of the multi
plicity of bills that viii be drafted the,
hope may come legislation that vii
permit wider scope in arriving at an.
praisal values.
They hope, too, that Congress mar
see ut to set up fund for the pur.
chase of bonds of the Joint stock Lane
Banks during periods OF depression IL
the securities market They point 10
the fact that foreclosures In some in
stances have resulted from difference
OF opinion between banks and bafl
examiners as to the value Of property
offered as collateral, as well as to I'M
easiness on the part OF credit organiza-
tons holding farm paper