Evening star., 1933-04-04
The Farm Mortgage Bill.

President Roosevelt's latest relief and
reconstruction move, for the refinancing
of farm mortgages, will find favor with
the great agricultural sections OF the
country. The farmers, struggling for
wears to make ends meet, have felt
the crushing burden of high interest
rates on Indebtedness. While many
of the farmers may find it difficult TO
understand the plans proposed by the
administration for increasing farm
prices and reducing production, all OF
them will readily grasp the details OF
the plan for refinancing their mort
cages and other Indebtedness. Forty
per cent of the farms, it is said, are
mortgaged, and the total OF such in
debtedness reaches the staggering sum
of S8,50O 600, 900. Other farm debts are
estimated at $500, 100000, bringing
the total up to about s12,000,0oo, 900.
The administrators farm mortgage
plan calls for the issue, through the
Federal Land Banks, of bonds bearing
four per cent interest. These bonds
may be used to make new loans or to
substitute for present indebtedness on
the farms. In no case is the interest
to be paid by the farmers to exceed
four and one-half per cent. The Gov
eminent guarantees the interest on the
bonds and is to be reimbursed by the
interest paid by the farmers. The re-
duction In the amount of interest paid
by the farmers will be substantial, for
interest charges on farm mortgages
have ranged as high as ten per cent.
Further, there will be some scaling down
of principal Indebtedness and the ex-
tension of time in which to pay off the
indebtedness will be materially helpful.
1t is not proposed by the President
that all of the farm Indebtedness be
ref1nanced through the aid of the
Government. A limit of $4,000 900 ,ooe
is placed on the issue of bonds. What
the administration aims to do Is to
case the burden on the huge number
of hard-pressed farmers, and to call
q halt to the thousands Of foreclosures
on farm properties, which are not only
taking homes away from the farmers
but also are grievous burden to the
holders Of many of the farm mortgages.
It is believed that the proposed action
of the Government is not alone in the
interest of the farmers, but also in the
interest OF many Of the creditors. The
latter may exchange their mortgage
holdings for bonds bearing four per cent
interest, guaranteed by the Government.
Instead Of defaults in payment OF
interest the creditors are given assur-
ance Of payment.
The need of some measure Of aid
to the farmers whose lands are mort
gagged has been widely recognized. 1t
was stressed by former President Hoo
yer In his campaign address last Oc-
tober In Des Moines. The bill now
presented by the Roosevelt administra-
ton for the consideration Of Con-
gress will probably find approval
among the Republicans as well as the
Democrats. It is planned to add the
bill as an amendment to the pending
farm relief measure which seeks to in
crease farm prices.
"I seek an end to the threatened
loss Of homes and productive capacity,
now faced by hundreds Of thousands of
American farm families" said Presi-
dent Roosevelt in his message to Con-
gress. He said that the proposed
legislation will not be a heavy burden
on the national treasury. And it should
not. The farms of America have not
only been productive, but constitute
basic industry. With the return of
prosperity there seems no doubt that
the trainers will be able to meet their
Indebtedness.
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