Evening star., 1932-12-24
R.E.C. BARES SLASH
IN INTEREST RATES
TO ALL borrowers
Cut Amounts to 0ne.HaIf of |
Per Cent, Starting
January |.
CHARGES ESTABLISHED
FOR SALE OF SURPRISES
Five Per Cent Will Be Asked on
Loans for Shipment CT Farm Prod
ucts to Foreign Countries. e

By the Associated Press.
The Reconstruction Finance Corpora
tion today made Christmas present to
banks, railroads and financial inStltu-
tions borrowing from tin the form OF
reduced interest rate on the loans.
1t amounts to one-half of per cent
per annum, effective January l, 1888
and will apply to new loans authorized
between January 1 and June 80 and
maturing on or before December 81, 1888
1t also will apply to outstanding
balances of existing loans for the period
from January to June 80.
The rate on loans to banks, trust
companies, building and loan associa-
tions. insurance companies, mortgage
loan companies, credit unions, joint stock
land banks, live stock credit corpora
tions, and agricultural credit corpora
tionS was reduced from 5 y per cent to
per cent.
Loans to receivers or liquidating
agents of closed banks was cut from
per cent to AZ per cent.
Farmers to Benefit.
The rate charged by regional agricul-
tural credit corporations to farmers and
stocknen will be reduced from 7 per
cent per annum, including the cost OF
inspection and appraisal. to 5i2 per
cent, exclusive of the cost Of inspection
and appraisal.
The new plan, however, requires that
the borrower pay not to exceed l per
cent of the amount of the loan as the
cost of inspection and appraisal of the
security for the loan.
The rate OF interest on outstanding
balances OF existing agricultural credit
loans is reduced one-half of l per cent
from January l to June 80.
The corporation will rediScount paper
for the Regional Agricultural Credit
Corporations at the rate of per cent.
Interest on loans to aid co-opera-
tives and similar organizations in
carrying and marketing agricultural
products and live stock is reduced from
512 per cent to S per cent and rate
of per cent is fixed for financing the
sale of surpluses OF agricultural products
in foreign countries.
This latter is the first time definite
rate has been fixed for foreign mar
keting. The rate on railroad loans Is
reduced from per cent to 512 per
cent.
The corporation will continue its
policy of fixing the interest rate on self
liquideting loans on each individual
application.
Low Rates Cited.
In view of the prevailing low rates
for money" the corporation announce
Inent said. the board of directors Of
the Reconstruction Finance Corpora
tiOn las reduced the rate of interest
o. discount on loans of the corporation
one-h2if Of l per cent per annum, ef-
fective January l, 1888"
After detailing the changes this
would effect in various classes of loans
the statement said:
The rate of interest on loans or
contracts to aid in the financing of
self-liquidating projects under Section
2OlA of the Emergency Relief Construc-
ton act of 1882, will be established in
connection with each loan application.
However, if a borrower under this
section of the law refnances all its
loan or contract or sells all its obli-
cations held by the corporation in con-
nection Herewith during period of
two years from the date its loan or
contract is authorized by the corpora
ton, on such a basis that the cost of
the money to the borrower is lower
than the cost of the money received
from the corporation. the borrower will
be permitted during such two years
to repay the corporation ON the same
basis as to yield as that Upon which
the borrower refinances such loan or
contract or sells such obligations, pro-
vided the return to the corporation for
the use of its money will not be less
than the rate of per cent per annum. "