Show tup agricultural CREDITS ACT OF 1023 statement by the secretary of agriculture ri henry C wallace on the last day it was in session congress enacted the agricultural credits act this act is designed to give the farmer the sort of 0 credit he bo needs to produce efficiently and market in an orderly way the products of the farm it is an effort by congress to meet a need which has been felt for at least fifty years the act may not be perfect quite possibly experience will show the need of amendments from time to time but it furnishes the basis for a system of intermediate credit adapted to farm conditions and farm needs salso also it should bring about a reduction in the interest which farmers must pay for or money borrowed the act is divided into two parts in n the first it provides government agencies for handling agricultural loans in the second it authorizes the organization of private agencies under government supervision for making loans joans on livestock security and on form farm commodities on the way to market the government go v loan activities will be carried on in connection with the federal land banks at the present time the country Is divided into twelve districts and in each of these districts there is IP a federal Fei leral land bank which makes land mortgage loans these twelve banks being directed py by a central federal farm loan bureau in washington in connection with each of these land banks there is to bo established an intermediate credit bank located in the same city w with ith the land bank and under the supervision of the officers and directors of the land bank the federal government supplies each of these intermediate credit banks with a capital of 0 not to exceed these intermediate credit banks are authorized to discount farmers notes which have been tak tn by banks and other financial institutions and thon then can carry such notes for a term of of from six elx months to three years the banks may also loan direct to farmers cooperative associations under conditions set forth in the act ii rr these intermediate credit banks may issue debentures which will have back of 0 them the farmers notes which the banks have taken the idea is that these debentures may be sold to people who wish a sate safe investment they are exempt from taxation just as the bonds issued by the federal land banks are exempt the interest charged by the intermediate banks may not exceed by one per cen cent the interest paid on the debentures issued and the farmer who borrows must not be charged an interest rate of more than one and one halt half per cent above the interest charged by the credit bank no doubt sonic some time will be required to get this machinery in working order it will be just like building up a new business it should not be very long however until the benefits will be apparent and the farmer will find that ho he can borrow needed capital tor for a period up to three years without having to pay an unduly high interest rate without having to renew his notes every ninety days or six months and without being in danger of having to sacrifice his bis crops or live stock because of a sudden financial flurry the second division of the act authorizes this the organization under a federal charter of national agricultural credit corporations these to be organized by private capital they will be under the supervision of the comptroller of the currency just as are other national banking institutions tut ions they must have a capital stock of at least they may issue collateral trust debentures up to ten times their capital and surplus such corporations will probably be organized in the western states where the livestock industry is important and where now cattle loan companies are in operation in addition to the provisions os of the act designed to furnish the farmer much needed intermediate credit certain cb changes anges have been made in the law under which the federal land banks operate and in the fed eral reserve act provisions for the establishment of the so called permanent organization of the twelve federal land banks is made by providing that three out of the seven directors for each bank are to be elected by the borrowers from the bank and three are to be appointed by the federal farm loan bureau the seventh director who will be the president of the board will be chosen from three persons who have received the highest nomination vote for this position by the borrowers or stockholders in the bank heretofore the maximum amount which might be loaned to any individual by the federal reserve act is amended by broadening the definition of what is called agricultural paper making it include the grading and processing of agricultural products by cooperative marketing associations heretofore the federal reserve banks have not been permitted to discount agricultural paper tor for a longer period than six bis months this period has been increased creased to nine months A large fatge number of state banks are not now members of the federal fe derat reserve system some of them because their capital Is not large enough to meet the requirements ot of the law an amendment to the federal reserve act lg Is carried in this bill designed to encourage small banks to join the system A bank which has capital only equal to sixty per cent of 0 the capital required of national banks may now be admitted it if within a reasonable time the capital will be increased to correspond with the capital required ot of national hanks banks the life of the war finance corporation po ration is extended up to february 29 1924 the expectation being that by that date the new credit facilities provided for under this agrical tural credits act will be sufficient to meet tho the needs this agricultural credits act of 1923 is one of the most important acts passed by the last congress it marks an earnest effort to provide the farmer with the sort of credit he must have to carry on efficiently it is not class legislation the results will be helpful to business in general because tho the effect will be to stabilize agricultural production and marketing |