Evening star., 1933-06-18
FARM RELIEF CHIEF
WINS ON ABILITY
Morgenthau Was Interested
in Soil as Young Man
in Texas.
BY GRACE HENDRICK EUSTIS.

Morgenthau, jr., the Federal Farm
Board has been changed from 6
maze of complications, out of which
even Houdini would have emerged with
his hands manacled, to a potentially
efficient organ for farm relief.
Son of the distinguished lawyer, Am
'basSador, expert on foreign politics anC
author, Mr.. Morgenthau drifted into ar
interest in agricultural matters as g
young man. His family sent him out
to a cattle ranch in Western Texas tC
recover from serious attack of scarlet
fever. Here he became so absorbed in
the products of the soil and their mar
keting that when he came back, he
returned to Cornell University, where
he had matriculated, and took course
IN agriculture in the State college there
Then he bought an apple farm IN
Dutchess County, N. Y. Shortly after
that young man, who was then the
Assistant Secretary of the Navy, named
Franklin D Roosevelt, asked him if he
would be sheriff of the county. This
offer Mr.. Morgenthau promptly turned
down.
In 1916 he married a Miss Elinor Fat
man of New York and by this marriage
he has three children.
In 1922 an opportunity came his way
and he took it. He bought the Amer
ican AgriculturiSt, the second Oldest
farm publication in the United States.
This he enjoyed intensely and when Mr.;
Roosevelt, then Governor, undiscouraged
by his failure to make Mr.. Morgenthau
sheriff, asked him to serve on his Agri-
cultural Advisory Commission, the die
vast cast. Mr.. Morgenthaus energy and
interest were funneled into one stream.
Tax Reduction Idea.
This agricultural commission started
out with the idea of reducing rural taxa
ton. Before the commission came into
existence, the system of taxing the dis
tricts in New York State was that the
richer the district, the more it got back
from the State for schools and high
ways. This the commission decided to
reverse so that She district with a low
valuation should set more State aid.
The principal object was to put the
rural schools on the sSme basis as
city schools and to provide a system
of good roads in farm regions.
BY accomplishing this with COM
bination of votes in New York City,
plus the rural votes, with bitter opposi-
ton from some of the upper New York
State cities, a saving of S25 100000 IN
rural taxation was made.
Mr. Morgenthau gives the cerdit for
this bolstering of the agricultural COM
munities of New York State to Frank
lin D. Roosevelt. He did more in this
respect in his two terms as Governor
than other Governors have done in a
lifetime" he said. This was due, he
continued, not only to the fact that
as a Democratic Governor he could
count on the enormous New York City
vote, but because he was genuinely in
terested in helping the farmers.
Now Mr.. Morgenthau is governor OF
the Farm Credit Administration. This
title was created on March 27, when
President Roosevelt issued an executive
order consolidating all Government
agencies having to do with permanent
farm legislation into one, known as
the Farm Credit Administration.
Passing of the Board.
The order went into effect May 27
and the Federal Farm Board, that poor
old lady who had struggled in a vague
way to mount the farmer on horse
that would run, who had spent mil
lions in the attempt and who hao
shriveled up with waterless diet OF
the depression, was given lethal dose
Her chairman, Mr.. Morgenthau, who
had come in with this administration
then became governor of the Farm
Credit Association.
Farm aid for the last 16 years has
been a hound-ridden experiment. In
1915 Congress passed an act creating
u Federal Land Banks throughout the
United States. They represented a
partnership between the farmer and
the Government and were formed for
the purpose of making first mortgage
loans to farmers at low interest rates
The Government subscribed most OF
the initial capital CT these land banks,
and the bulk of the loan funds was
raised by sale of bonds to the pupllc
Their business was transacted through
National Farm Loan Associations, who
bought stock in the banks and lnVestl-
gated and checked loans.
This picture was pretty as a posy
until 1881. The Land Banks had palo
back to the Government all but $205,O
of the capital stock it had loaned them
Their total capital was $66,0OO 900, Of
which S65 5000. 600 was owned by Lane
Bank stockholders. But by this time
the cumulative effects of the depres-
sion and the farmers inability to pay
had deprived the banks OF loan re-
sources and a new subscription 0.
Government capital TO the tune 0!
5,000,0C0 was made.
Money to Save Farmers.
Then through other means beside:
the Federal Farm Board, the Govern
ment began to pour out money 10 save
the farmers from bankruptcy. Crol
and seed loans in small amounts, ols
tributed by the Department OF Agrl'
culture are now outstanding to tht
amount Of 125,O00,000 and new sys
tenn of lending agencies. the Regiona
Agricultural Credit Corporations, were
organized by the Reconstruction Fl
nance Corporation. These put out an
other sl50,o00.0O0 to meet the emer
gency caused by freezing OF loan ca
pacities of country banks. Still tn
situation remained acute.
This is simplifying the explanation
OF an extremely involved governmental
experiment to the least common de
nominator. The gist Of the matter i
that the system was not fool proof.
Mr.. Morgenthau has been charge'
with the duty of putting all these lend
ing agencies and loan funds togethe
into one and building a single unlflet
system. This also will include loan
to agricultural co-operatlves which /
the surviving remnant OF the work IN
Farm Board originally undertook TO DC
Mr. Morgenthau's idea is TO Great
a self-supporting banking system 10
agriculture which will operate unoe
Government supervision. The Farm
Credit Association has had an oppor
tunity to learn plenty from the ms
takes of its predecessor, and In tn
emergency farm mortgage act, Whlc
is coming up before the Senate, ne
capital is provided by which the Ian
Banks can reduce their interest rate:
grant extensions to farmers. make ao
ditional new loans and acquire mort
cages held by private holders. TIL
farmers debt to the Government
estimated at S8500.000,000. OF whic
the Land Bnaks hold $1,l0000000'
This act permits the Land Banks
issue bonds at Az per cent intere:
and the Treasury guarantees paymer
on the interest of these bonds.
Besides this, there is a 5000 900 oC
fund provided for in the act, frol
which the farm loan commissions
tthere is one commissioner to every or
of the II Federal farm districts) ca
make direct loans TO the farmer