Evening star., 1933-08-20
FARM FINANCING PROGRAM
GAINING In IMPORTANCE
Unification of Agencies and Expansion
of Activities Putting Credit Agency
on Permanent Basis.

creasing rapidly There were more
than 10000 applications in June alone
for approximately $4,000, 900 ON first
mortgages. This Is nearly twice the
total for the entire six months Of
1882.
The competition of the low interest
rates and liberal terms offered by the
land banks means a general lowering
of farm mortgage rates and less ex-
citing conditions. The commissioner
loans are. providing new protection
against loss of farm homes and the
two classes Of loans are tending to
retore and stabilize land values.
We have found a way to strike
double blew at the menace Of debt and
frozen credit In farm communities.
Beginning in Wisconsin. where the sit
uation seemed most acute, we are deal
ing In wholesale fashion with the
mortgages held by closed and restricted
banks. AS fast as the land can be
appraised We are offering to buy these
mortgages for an amount in cash which
our appraisal shows them to be worth.
This will mean lower interest and fire.
quently reduction in debt for the farm
er and cash dividends for the bank
depoSltorS. In many communities We
expect 1t to mean restoration of bank
ing facilities and resumption Of the
normal flow of business. The plan has
already been extended to five States
and We intend it to apply to every State
in the Union. We think it will be an
extremely important contribution to ma
tional recovery.
Would Prevent Crisis.
We are not only trying to liquidate
frozen credits in rural communities.
We want also to protect the farmers
and those dependent on them from
getting into a similar situation again.
One way we hope to do this Is by
giving farmers better chance to con-
troll their own credit-production
are about to set up IL production
credit corporations. one in each land
bank district which will advance
capital to credit associations Of farm
ers. These associations will lend to
their members for production needs,
but every borrower must subscribe to
capital stock Of the association to the
extent Of S per cent OF his loan. There
will thus be substantial guaranty
back of the notes, which will be ell
gible for rediscount by the Federal In
termediate Credit Bank.
Associations Of this character have
IldO All extraordinary record OF sur
vival and usefulness in a period when
banks were failing all around them
The idea is not untried. The main
source of loan funds will be the sale
to the investing public of debentures
of the intermediate credit banks rather
than the Federal Treasury, as in the
case of existing emergency credit agen-
cies.
Another step is being taken to bring
control of the farmers credit facilities
closer to him. The Farm Board is
being replaced by a system of regional
banks for co-operatives with q central
bank to handle only the larger loans
and those Of a national or international
character. Directors in each region will be
responsible for their local loans and
they will be the same directors who
will pass on the credit applications Of
individual farmers in the same locality.
It will be seen that this program of
farm financing consists not merely Of
steps toward recovery, but Of steps to-
ward satisfactory plan Of credit based
on recovery and designed to prevent Q
future collapse.
For the individual farmer and for
associations Of farmers we have like
objectives: To give them a chance to
pay out and to run their own businesses
in a business-like way.
Copyright, 1888. by North American News
paper Alliance. Inc