Evening star., 1937-07-12
Text of Roosevelt Veto
Message D;sapprov;ng Measure to CONTINUE Low
Interest on Federal Land Bank Loans
Cites Costs to Treasury.
b. the Associated Press.

BV the ASSoclated Press.
-HE text Of President Roosevelt's
message to Congress today
vetoing a bill to continue low
L interest rates on Federal Land
Band loans, follows:
To the House OF Representatives:
return herewith, without my ap-
proval, H. R. 6763, entitled "An act
to extend for one additional year the
81 per centum interest rate ON GER
tain Federal Land Bank loans, to pro-
vide 4 per centum interest rate on
such loans for the period July l, 1888,
to June 30, 1899, and to provide for
per centum interest rate on Land
Bank commissioners loans for a
period Of two years"
Section ! Of the bill extends for two
additional years the policy originally
adopted as an emergency measure in
Federal Land Banks are allowed to
pay interest on their loans at rates
lower than those provided In their
mortgage contracts.
SuS 1eA"kC VvloChNus
Section Of the bill broadens the
| field of loans on which interest reduc-
tions are granted by providing that
| for period Of two years interest may
be paid at the reduced rate of 4 per
cent on loans made by the Land Bank
commissioner.
Section Federal Land Bank
| loans:
At present, through the sale Of
bonds to the investing public. new
loans are being made by Federal Land
Banks at the lowest rate that has ever
been made available to farmers gen.
orally in this country, namely. 4 per
cent per annum. A decrease in farm
mortgage interest rates has been
brought about through the reflnancing
operations of the Federal Land Banks
and the Land Bank commissioner.
The average rate OF interest on the
private loans refinanced by the Fed
eral Land Banks in 1888 and subse-
quent years has been 63 per cent.
Consequently, those farmers who re-
| financed their private loans in 1888
and 1884 by converting them into S
per cent Federal Land Bank loans cut
their annual interest charges more
than 20 per cent, while those who have
rehnanced at the present per cent
| duction in excess Of 40 per cent.
believe, therefore, that there is no
| justification for continued Govern
ment subsidy OF Federal Land Bank
! interest rates below the unprecedent-
edly low rate these banks are now
| offering farmer borrowers on a busi-
! ness basis.
Farm Price Rise Cited.
Furthermore the ability OF farmers
to pay interest at the rates provided
for in their mortgages with the Fed
eral land banks has been very sub
stantially proved, due to an increase
of more than 100 per cent in the
| level Of farm prices since the emer-
gency period of 1928 In Decem-
Der, 1896, the index of farm prices, as
reported by the Department of Agri-
culture, stood at 1876, as compared
with 55 for the month Of March. 1888,
and an average of 100 for the pre-
war period, August, 1909, to July,
1914. The gross farm income as
estimated by the Department of Ag-
riculture, also rose from S5,337 100000
in 1882 to 1880 900, 900 in 1886.
As an illustration of the tightening
of the interest burden during the last
four years through Improvements in
farm prices and the reflnancing of
! farm debt, the following instance may
| be cited The quantity of farm
| products required to meet the annual
interest charge on a 63 per cent pri-
vate loan reflnanced AS per cent
Federal land bank loan in 1888 is