White Bluffs spokesman. [volume] (White Bluffs, Wash.) 1907-1938, 1933-08-03

debtor of his financing agency.
"The policy of this bill is to provide
the stimulus in the form of Govern
ment capital and supervision to the es-
Enlistment of local institutions in
which farmers are participants and
owners and through which necessary
credit may be provided on safe bust
ness basis and at a reasonable cost.
The same general observations may
be made with respect to credit for
cooperative agricultural associations.
This bill continues and strengthens the
present system of cooperative credit.
The change proposed in the bill in the
| interest rate on loans to cooperatives,
it is believed, will permit cempensa-
tory rate and will eliminate the objec-
ton frequently made that the Govern
ment makes loans to cooperatives at a
lower rate than it itself can borrow and
thus is engaged in an Improbable bust
ness as we'll as one in which the Gov
eminent is unfairly competing with
private lending.
"The bill sets out system of fur
I nishing both production and coopera
tive credit in which the borrower is an
interested participant.
''The bill also contains amendments
to the Farm Loan Act which have as
their purpose the strengthening of the
land-bank system and the broadening
of it's field of usefulness. The most i'm
| portant of these amendments are the
one which eliminates double liability on
national farm-loan stock with respect
to future indebtedness and the one
which brOadens the class of eligible
borrowers under the land-bank sys-
| tenn"
Under this act the interest rate on
mortgages held by the Federal Land
banks, made through national farm
loan associations, is reduced to max
imum of Az percent for years, and
provision is made for postponing pay
ments on the principal for that time.
Farmers whose mortgages are held
by others than the land banks may
obtain relief through obtaining new
loans from the landbanks to pay off
existing mortgages, or, where the
holders of these mortgages consent
they be traded to the land-bank for
bonds on which the interest is guaran-
teed by the United States Borrowers
then obtain the benefit of the lower
Il hoy i,,to To o,,r
ton in principal accomplished in the
exchange.
The question was asked the Farm
Loan Commissioner, "Do you expect
those who now hold first or second
mortgages or the farmers unsecured
notes to do much scaling DOWN." To
which he replied, Perhaps I can best
Illustrate that by one of the loans made
during the first week after the Emer-
gency Farm Mortgage Act was passed.
trates the point:
"We will call the farmer Jones, for
that is not his name. He had first
mortgage on his property of $780,
The agent sent an appraiser to the
property after having received the
application and the appraiser reported
that the land and the buildings were
worth $4,000. From this, of course, it
is quite evident that the hrst-mortgage
holder virtually owned the farm. Jones
was able to get the mortgagor to agree
to scale down the mortgage 10 per cent,
or $3.50, by offering to get him cash
from the Farm Loan Commissioners
agent, stationed at the bank. However,
the agent could not make a loan Of
$4,000 on property appraised at only
$4,000. Fortunately, the farmer had
some personal property which the
appraiser valued at 1878. When this was
added to the $4,000, the farmer was
able to offer the agent collateral, per-
sonal and real, amounting to $4,073.
Thus the agent was able to make a
total loan of $4,000 or rs per cent of all
the collateral put up. Since the farm
was only valued at $4,000 the agent
took chattel mortgage of SAIL and a
lien on AZ acres of crops amounting to
$l89. OF course, as the chattel mortgage
and crop lien is paid off it will be ap-
piled on the Commissioners loan.
Thus the farmer secured curtail-
ment Of his debt of 5000, the rate of
interest on his loan was reduced per
cent, and he had 13-year period in
which to repay. During the first years
he will pay only interest Both the
farmer and the holder of the mortgage
have improved their positions"
The conclusion of this article will be
given in our next issue. Mr.. Hill will
then explain the relief offered to those
who are facing foreclosure or whose
farms have already been taken from
them.
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