Evening Republican, Volume 22, Number 294, Rensselaer, Jasper County, 8 December 1919 — FARMERS TO OWN BIGLAND BANKS [ARTICLE]

FARMERS TO OWN BIGLAND BANKS

George W. Wickersham Tells How Federal Institutions Will Be Taken Over. TO BUY GOVERNMENT STOCK Eventually the Borrowers Will Acquire Complete Ownership of Banks Established Under Federal Farm Loan Act. That the federal land banks and the Joint stock laud banks are important .supplements to the national bank system and the federal reserve system was emphasized by former Attorney General George? W. Wickersham In the eral court at Kansas City, where he appeared with Charles E. Hughes and W. G. McAdoo to defend the constitutionality of the farm loan act. Mr. Wickersham, who with Mr. McAdoo, appeared as attorneys for the Joint stock land banks, made very clear the exact service which the federal land banks perform and their exact relation to the financial system fltthe country. He also made clear in what respects the joint stock land banks differ from the federal land banks. Protecting Small Borrower’s Rights. Both types of banks (federal and joint stock) were created by the government to provide aid for the agricultural Interests of the country. Mr. Wickeraham said that the government with wisdom and singular comprehension, had reached out to take care of every element of borrowers. Therefore t ho federal land baoks were crewed ttf provide credit for small borrowers, and the joint stock land banks were created to provide a similar agency through wplch the larger borrowers among farmers might secure ample funds, without having to rely upon the funds which had been assembled for the use of the small borrowers, and without danger of depriving the small borrower of the very money which had been assembled for his particular use. He pointed out how in the case of the establishment offederal land banks the government had subscribed to the stock of these banks as a temporary aid to the particular class of borrowers it was intended these banks should accommodate. But, he said, this was only a temporary aid and that the government had provided that the stock which had been subscribed by the government should be taken up eventually by the borrowers so that in the end, in a very short time, the small borrowers will own their own banks, that is, that the federal land banks will be privately owned in the end even as the joint stock land banks are now privately owhed.

Federal Banks for Associations. “The federal land banks do not lend to individuals,” said Mr. Wickersham, “they lend to organizations of borrowers, who together must desire at least $20,000, and who must organize themselves into a farm loan association, and they must subscribe to 5 per cent of the amount of the loan which they seek, In the stock of the federal land bank, as a condition to securing the loan. “Provision is made that when these banks are set up, if within a limited time subscriptions are not made to the stock by others, the federal government, through the treasury department, shall take up the* minimum amount of stock with which they are authorized to start business, to-wit, $750,000.00. Then, as they proceed in their operation, as they loan to these associations, and as these associations subscribe to their stock, by and by, bv the operations of the system, the stock which the government has taken is retired, and ultimately those banks come into the control of their stockholders. Farmers to Own Banks. “The federal government, as a stockholder, will pass out, and if the system be successful, after a certain length of time, the land banks will be owned by the various loan associations which are borrowing through the land banks, and they will go ahead on the Impetus of private ownership. “Having thus provided a», system whereby this great s«hpme shall be launched and become once operative and money shah become available to the farmers desiring it, the act also provides that there be created a different class of banks, namely, the joint stock land banks. “Following the analogy of the national banks, the act provides that from the outset, those banks shall be organized by private individuals. The stock shall be subscribed by private individuals, and when $250,000,00 is subscribed, then the bank may begin its operations. x - Joint Stock Banks Controlled. “Since the enactment of the law, 27 of such banks have been organized in different parts of the country, and they are set forth in the petition, and their aggregate capital is something more ; than $5,000,000. 4 “Now despite the fact that those banks are privately owned, from the beginning of their operations, they and their operations are subjected to control. They are Invested withthe same powers, they are made subject to the same liability as are given to and impoaed upon the federal land banks. [