Evening star., 1940-05-05
Farm Mortgages and
Politics
BY Frederic J. Hdsktn.

tenancy in the United States has de-
veloped into about a. involved q polit-
ical tangle Is Washington has known
for some time. While, on the surface,
the economic aspects Of the Jones'
Wheeler farm mortgage bill and the
Jones-Bankhead tenant mortgage bill
are those most emphasized In discus.
sions and committee deliberations, un-
derneath there seethes a political caul-
dron.
The Jones' Wheeler measure IL de-
signed to bring about number Of alter
ations In the existing situation in respect
to farm mortgages. In the eyes Of many
farmers, the fact that the measure
would reduce to about 81 per cent the
interest charges on mortgages negotiated
through governmental channels Is para
mount and sufhciently compelling to
prompt them to favor the legislation.
In fact members Of Congress and, espe-
cially, members Of the committee partic-
ularly concerned, are in receipt Of thou
sands Of letters urging enactment Of
the proposed law.
But that is far from the complete
story. In some ways the inner tale reads
like an Old World intrigue. The meas
ure would reduce interest rates, but also
1t would build up paternalistic system,
with the Federal Government the mort
gagee of thousands, yes, tens Of thou
sands Of farmers. Under the terms Of
the measure, the old national farm loan
associations would lose most Of their
mutual cooperative character under
control Of the farmer members, and
would become tools of centralized Fed
eral authority at Washington-the Farm
Credit Administration.
Back of the Farm Credit Administra-
ton would be the Secretary of Agricul-
ture and back of the Secretary Of Agri-
culture-in the present instance Henry
Agard Wallace-would be the President
of the United States. In the corridors
Of the Capitol it is freely. talked that,
under the terms Of the measure, Secre-
tary Wallace would have political ma
chine which would rival any other that
could be built up.
oCAOAC q A0AAAC1 SOA1O OUtdUl u lOdll Vi
ref1nance loan on more favorable
terms, his application would have to
pass through the hands of one of Mr..
Wallace's appointees, direct or indirect,
and while the letter of the law would
mark the politically Indifferent channels
through which such an application
would pass. experienced politicians seem
to be aware that sometimes channel
markers have been tampered with. All
this is no secret; 1t is being freely dis
cussed at Washington and, in the dis
cussion, the political implications are
beginning to outweigh the economic
aspects.
Then, too, communications received at
the Capitol from farmers and farm or
ganizations who are not solely inter-
ested in the lower interest rate but have
wider vision, voice q distinct regret at
the sacrifice of farmer independence
which would be entailed by the proposed
legislation. 1t appears that large num-
Der Of farmers have considerable pride in
the old national farm loan associations
which were set up under the original
Federal Farm Loan Act Of 1914. For
the most part they have worked well.
The farmer borrowers have been stock
holders in these cooperative lending
associations and have, at least super
ficially and in many cases really, con-
trolled their own fiscal affairs with the
Federal Government more or less re-
motely in the background.
This would be materially altered by
the new legislation and Uncle Sam would
move in as the paternalistic mortgage
whose benevolence might or might not
be subject to political sway. The trend
Is recognized as part Of the trend toward
Federal paternalism. 1nasmuch as hun
dreds Of thousands Of American farmers
like to continue to look upon themselves
as rugged individualists and capitalists
in their own right, the whole idea ap-
peals to them as verging too closely on
sort of Federal serfdom.
While the Jones-Wheeler bill has at
tracted chief attention, it cannot be con-
sidered apart from the pending jones'
Bankhead bill, which provides a system
Of insured mortgages for tenant farm
ers. "Both measures are colored with the
same dye, both cut to much the same
pattern-Federal paternalism.
The Jones-Bankhead measures title
says it is IAN act to promote farm own
ership, -" to encourage sale Of farms
held by absentee owners to farm ten
ants, and to enable farm tenants to be-
come owners of farm homes" The bill
would, indeed. tend to do all that, but 1t
Is pointed out by close observers that 1t
also would increase the paternalistic
control Of the Federal Government over
the farmers Of the United States, add
ing to the enormous group Of what have
been called prospective Federal farm
serfs, another large group Of tenant
farmers.
Loans would be made to tenant farm
ers at basic interest rate Of per cent
with insurance and service charges add
ed bringing the total up to per cent.
Loans would be made up to 90 per cent
Of appraised value and, should the bor-
rover have livestock or equipment of
sufficient worth, the loan could run to q
full 100 per cent. Moreover, q long term
Of 40 years Is provided for amortization
and, 20. paternal Is the measure, that
should borrower encounter III harvests
or other hard luck he might have Q Pc
Rod Of i've years extra grace.