Evening Republican, Volume 22, Number 297, Rensselaer, Jasper County, 11 December 1919 — M’ADOO SAYS FARM LOAN ACT HELPS FARMERS [ARTICLE]

M’ADOO SAYS FARM LOAN ACT HELPS FARMERS

Former Secretary of the Treasury Describes in Kansas Crty Court How Law Operates. PART OF FINANCIAL SYSTEM Sustains Constitutionality of Law Which Does for Agriculture What National Banks and Federal Reserve Act Do for Commerce and Industry.

How the federal farm loan act came Into existence as the result of a longstanding and nation-wide need was told In the United States court at Kansas City by former Secretary of the Treasury William G. McAdoo. The right and duty of the federal government to aid and encourage agriculture was told by former Justice Charles E. Hughes and former Attorney General of the United States George W. Wickersham. Interest Rates Reduced. As brought out by Mr. McAdoo, the farm loan act was passed by congress to provide ample funds for agricultural development and agricultural operations. Mr. McAdoo, who was secretary of the treasury at the time this law was passed, said that it was the intent of congress to provide: 1. Plenty of money for the farmers. 2. Low rates of interest. 8. Long and convenient terms of credit. Mr. McAdoo showed how this act already had reduced rates of Interest in many and extensive sections of the United States and had so stabilized interest that rates were now almost uniform throughout the United States. He showed how the federal land banks were created in order that the farmer of small means might have credit and borrpw. money at as low rates and on as easy terms as the soanij of larger means. Protects Small Borrower. He told also how the joint stock] land banks were created to protect thej farmer of small means in his right to low rates and easy terms. He said that without the joint stock land banks there was grave danger that the heavy borrowers would absorb all the money which the federal land banks could assemble and thus leave the small borrower in much the same condition as before. The farm loan act also has operated to make more generous everywhere the terms on which farm mortgage, loans are made. The- amortization! plan makes It possible for the farmer] to borrow the money he needs and to pay it back in small annual or semlannual installments as he Is able to i take it out of the soil. Tax Exemption Necessary. “Now, of the farmer was to get the real benefits of this act,” said Mr. McAdoo, "if he was to secure plenty of. ;• money and at a low rate, it was neces- ■ fury that the quality and character of I the securities issued by these land banks should appeal so strongly to capital, that they could sell on a parity with municipal bonds or other tax-ex-empt securities. Therefore tax ex-J emptibn was granted to the bends of these banks. Without tax exemption the entire pbmfana.”