Evening star., 1933-02-19
FARM REF|NANC|NG.
BILL IS PRESENTED
Unlimited Bond Issue Under
ii Jones Plan May Reach
F. $4,000, 900, 900.
(Continued From First Page.)

Chairman Jones, and Senator Ship
stead, Farmer-Laborite of Minnesota
who sponsored similar bill in the Sen
ate, had conferred in regard to the
measure. The House Committee or
Agriculture, Mr. Rainey said, would give
the measure consideration tomorrow
He indicated that the hearings would
be limited to Government officials, who
would provide data regarding the agri-
cultural loans now outstanding, anC
that he expected prompt report of the
bill to the House.
Would President Hoover veto such
b bill?" Mr.. Rainey was asked.
Il don't know" replied the Demo
cratic leader. "If he did, we would
have to take it up in the next Congress.
All Government agencies Mr. Rainey
said, now having to do with loans to
farmers, including the Federal Land
Banks and the Intermediate Credit
Banks, would be consolidated into the
Agricultural Loan Administration,
which in turn would be bureau of the
Department of Agriculture.
Farm Board Abolished"
"The Federal Farm Board is abol-
ished under the terms of the BILL" Mr..
Rainey said.
He insisted that the operation of the
proposed new bureau of the Depart
ment of Agriculture would require far
present agencies and that it could be
economically run. Like Chairman
Jones, Mr.. Rainey said that the bond
issue, to be substituted for the farm
mortgages would not cost the Gov
eminent dollar"
France is already doing similar
business for its farmers, continued Mr..
Eainey. He said that under present
conditions farmers were unable to meet
mortgage payments or the interest on
the mortgages. 1t was essential, he
said, that they be aided Immediately,
not only for their own sake but for
the sake of the mortgage holders
among them insurance companies and
savings banks.
Farmers are charged now 61a to 8
per cent, and even more, for their
loans," said Mr.. Rainey. They cannot
pay, and there is no prospect of their
being able to pay under present condi-
tions. Mortgage holders would be glad
to substitute 2l4 per cent Government
bonds for these mortgages on which
they can collect nothing today. If the
mortgage holders took over the land
they could not get the face value of
the mortgages. It would do them no
good
Mr.. Rainey explained that the mort
cages would be taken over by the Gov
ernment at their full face value, and
tbs bonds substituted for them. The
farmers would have to pay the Govern
ment, thereby redeemtng the bonds,
which would run for a period OF 46
years. Instead of paying 612 per cent
and upward in interest charges, how
ever, the farmer would pay the Gov
ernment 3l4 per cent interest.
Bonds Tax Exempt.
The bends, Mr. Rainey said, would
posed of by the holders, il they desired
to turn them into cash, in the open
market Any individual, insurance
company, savings bank or corporation
or company holding farm mortgages
could turn them into Government bonds
If they desired under the terms of the
bill The Federal farm loan bonds and
intermediate credit loans, he said, would
be refnanced as well as the mortgages
now held privately. Further, he said,
the bonds could be purchased by banks
which in turn could issue bank notes
against them.
Every part of the country would be
affected by the Jones bill, New England
as well as California and Iowa and
Georgia. 1t will embrace farm mort
cages everywhere. There is no COM
pulsion on the part of the Government
to make holders of mortgages surrender
their mortgages for the Government
bonds. But Mr. Rainey was of the
opinion that most of the present hold
erS Of farm mortgages would be de-
lighted to do so. Further, he believes
that if a farmer found he preferred
the Government ref1nancing plan to
continuing his payments under his
present mortgage he could readily force
a mortgage holder to accept Govern
ment bonds i'll place of the mortgage
by simply ceasing to make any pay
mentS on the mortgage.
1t is expected that if Mr.. Rainey and
his Democratic colleagues seriously
press for consideration of this legisla
ton, it will lead to wide discussion.
Sees Obstacle in Senate.
Senator McNary Of oregon, Repub-
Gcan, chairman of the Senate Commit
tee on Agriculture, expressed the opin-
ion last night that the Senate would
not give consideration to the bill at
the present session, no matter what the
House did about it. He said that
similar bill had been introduced by
Senator Shipstead in the Senate some
time ago and had been referred to
subcommittee. Members of the sub
committee had informed him, he said
that the measure was too complicated
and could not be considered at the
short session.
Chairman Jones issued a statement
regarding his bill, in which he said:
Provision is made for the issuance
OF bonds bearing interest at the rate Of
2 per centum, and the exchange of these
bonds for farm mortgages of all kinds
on basis not to exceed 80 per cent
of the fair value of the farm; also to
exchange such bonds for the outstand-
ing bonds of Federal Land and Joint
Stock Land Banks at a figure not in eX-
cess of 10 per cent above the amount
actually paid for such bonds. The mort
cages will then be refinanced at pa
per cent interest plus l per cent for
amortization in such a way that the
mortgages will be liquidated within a
period Of 46 years. l regard the re-
financing of farm mortgages and the
scaling down of interest rates as one
of the most pressing problems of the
hour. The solution Of the problem will
do much to relieve the tension and thus
furnish a method of liquidating the
undue burdens on the farms and ranches
OF our country. The accomplishing OF
this end will also promote the economic
welfare of the entire Nation"
La Guadia Proposes Plan.
Representative La GuarGia, Re
publican, OF New York, also proposed a
mortgage plan.
II have introduced a bill creating q
national farm and home credit bank, u
he said.
II firmly believe th.t it will take
care Of our mortgage situation, both
farm and home, for the next SO years
THE bill was prepared after consul
tation and research by the Columbia
Legislative Drafting Bureau and in
cooperation with Prof. A A. Berle OF
Columbia. who has given the matter 4
great deal of thought and study. Both
Prof. Berle and I conferred with
Senator Cordell Hull Democrat, ot