Evening star., 1932-10-21

mortgage which has caused thousands
of farmers to lose their homes remains
a constant threat to business and the
success of agriculture. My program is
opposed to and aims to stop the ruthless
foreclosure Of farm mortgages. 1t Is
economically unSound to sell out an
honest, hard-working efficient farmer
but more than that such a procedure
constitutes in most cases social, moral
and a human wrong. And moreover
the position Of the institution, the bank
or the insurance company holding the
mortgage is not bettered by thus be-
coming large land owner. The natural
result of tax sales and mortgage fore
closures is the lowering of most farm
land values to point below what
should be their true worth.
In 1916 Democratic Congress under
the leadership of President Wilson en-
acted the Federal farm loan act. This
act provided means for the Federal
Government to deal with this problem
and effectively to furnish relief for the
borrowers in the Federal Loan System
and to lead the way for other mortgage
institutions not directly supervised by
the Federal Government itself to give
like relief to their borrowers. By the
end of 1881 these Federal land banks
became very important units in our
financial life. Their loans at the end
of that year amounted to approximately
81, ,16S, ,O0O, 900. while those of the joint
stock land banks approximated $780,
100000.
Some of these joint stock land banks
have pursued policy of destructive sell
fishness contrary to the spirit and pur-
pose of the farm loan act, an act framed
to improve the farm mortgage condition
of the Nation. Some of them have fore
closed upon the farm debtrs with CAL
lous disregard of the interest of these
debtors and of the public interest gen.
orally. They have sold these farms at
distreSSingly low values and in some in
stances have retired the corresponding
farm bonds purchased in the open mar
Set at even lower prices. Thus there has
been shown net profit to those banks
on this sordld transaction, but in act
uality heavy loss to the general COM
munity.
Cites Farm Board Powers.
Apparently after belated recognition
Of these disastrous and unfair practices
President Hoover in his speech at Des
Moines on October took occasion to
disclaim responsibility for the policies
of these joint stock land banks, but he
overlooked the provisions of section II
of the Federal farm loan act which de-
fines the powers of the Federal Farm
Board and which provides that Federal
Farm Board with power Ito exercise
generally supervisory authority over the
Federal land banks. the national farm
associations and the joint stock land
banks" For the failure to enforce this
<J,,fu ho 10 his
administration are to blame.
This is just another example OF this
administration failing to use. or mis-
using agencies already created-and
which if properly used would have
saved this country much of its sui
fering
1 propose that these powers of the
Federal Farm Board shall be fully ex-
ercised to the end that this distressing
situation shall be Immediately rene
died and to the end that the enlight-
ened purposes of the Democratic
created farm loan act shall be fully
carried out The present administra-
ton has been derelict in another par
ticular
The last Congress recognized the ne
cessity for stopping the wholesale custer
of farm owners. In an act approved by
the President February 2. 1882, Gen.
gress provided that the United States
Treasurer should subscribe for S125,-
100000 Of stock in the Federal Land
Banks. OF this amount. $4,000, 900
was provided in order that the banks
might extend the time for the pay
ment of past-due mortgage install
ments
The act specifically provides that this
fund should be used exclusively to sup
ply any bank with funds to use in plac-
ing of the amount of which such banks
might be deprived by reason of the
granting of extensions of mortgage pay
ments. A great many banks have given
extensions and have been reimbursed
out of this fund. but they violated the
obvious intention OF the law and Of the
Congress which passed it. and destroyed
the usefulness of the purposes of this
act when they frequently required bor-
rowers to give crop loans and other mis-
cellaneous securities for such extern
sions, for they thus made it difficult
and often impossible for farmers who
were delinquent in their payment, to
use their credit for normal farm produc-
ton purposes and indeed for family
maintenance.
Will Enforce Law.
! These banks pursued this narrow and
indefensible policy. The blame for not
enforcing the intention of the law must
be borne by the Hoover administration
toward the farmer and his problem
AS President shall propose to Congress
a definite plan for the refnancing OF
farm mortgages in line with the prin-
ciples which 1 stated in my Topeka
speech. and which 1 repeat here today
1 shall recommend legislation to the
Congress for the scaling down OF
amortization installments of Federal
| land bank borrowers when in the judg-
ment CT bank directors conditions JUS
| tify such action. with provision for de-
t, ferring such unpaid amounts to the end
of such amortization periods. And
shall enforce such legislation.
| This partial and temporary extension
will help the farmers to save their
farms until they can secure better
net income through the working out of
| the plans which l have discussed for
the solution of the general farm pro-
| gram.
| AS for those farm mortgage institu-
| tions, not under the control of the Fed
! eral Government, I renew the state
ment made in my address at Topeka
| declaring for loans by Federal f1nancia
/ agencies to such concerns to enable
them 10 carry oefaulted mortgages ol
deserving borrow ers. 1t must never be
forgotten that the funds so loaned the
banks are primarily for the benefit o1
| the farmer and must be so employed
| Finally propose consideration by Con-
gress of the necessity for complete
reorganization of the means provided
| to operate in the field of agricultural
| finance.
At the present time We have at least
seven agencies concerned with farm
mortgages Some of these are direct
agencies Of the Federal Government
Some of them are corporations operat-
ing with funds provided by the Federal
Government. Others are still more re-
moved from the Government, but are
under partial Government authority
Within my broad agricultural program
1 advocate the coordination of such
agencies to the end that the Federal
AGRICULTURAL policy in regard to farm