The Nome nugget., 1950-03-17
SOMETHING TO CHEER

SOMETHING TO CHEER
 (By George s. Benson, President Harding College) group of Texas farmers have made some refreshing and encouraging At financial sacrifice to them selves, they have sent healthy slice of federal cash back to Washington with note to the U. S. Treasury which said in effect Here's your money By struggling little harder and pinching pennies, get by without it.
 Newspapers and farm journals sent up huzzahs; and the Saturday Evening Post wrote glowing editorial praise The unsolicited return of federal funds to the U s. Treasury especially makes news at time when the trend is altogether in the other direction In fact there angles of this action of the Texas farmers that justify attention It encouargingy shoWs in the first n stance that the spirit of independence is not dead in country; and, secondly, it spoghts sensible project by the federal government in the realm of financial sistance.
 The Texas farmers who have made this second Decla- ration of Independence members of the 36 Produc tion Credit Associations in Texas There B 900 of them Since 1883 when the PCAs established, the 36 agencies had accepted $8000000 of government ital for lending; and with it, of course regulations and controls However, the entire lending program was handled and the administration of the 36 agencies carried by the farmers themselves That's the clue, no doubt, to the of their venture
 Each time the PCAs made farm loan (and 236,OOO were made up to 1950) the recipient bought prOpor tonate amount of stock in the association payable on installments like his load repaid The stock buying was mandatory; the idea being that ultimately the PCAs would be owned lock-stock-and-barrel by the farmers
 With the government funds, plus the accommodating capital from the stock sales and somewhat slim profit return accumulated in reserves, the 36 PCAs have made loans toang $844 434 623 Ten years after they were established they found they still were operating with $656OOOO of the original federal government cap ita They could keep it indefinitely The government wasn't asking for It. But the farmer OoardS got toetel and talked things over
 With the government money in their corporate setup they still were under the thumb of the government They all wanted get out from under. Yet there were not enough surplus funds to anywhere near make the payoff The farmer lender borrowers thereupon Gin 1944 agreed to assess themselves much higher inter est rate and sfer service fees. Moreover all Of them began to dig down in their stocks and buy extra stock in their 36 PCA's.
 Shortly after January 950, the last U S. dollar was returned to Washington in final settlement check for $1O5 OOO The Texans had their independence again. But it hadn't been bought cheaply Not only had they strained themselves financially to achieve it, they also were tossing away whooping tax immunity that would cost them another pretty penny With the government out as partner their exemption from income and other taxes was lost Taxwise they're on the same basis as any other private lending agency.
 The commendable action of the Texans attracts our attention the entire farm credit system which started with establishment of the Federal Land Bank in 1917