90 UNIVERSITY OF ILLINOIS 



There is no better security in the world than a farm mortgage, 

 properly made, not even a Government bond itself. While I have 

 no desire to place any security above a Government bond, I do wish 

 to say that when farm mortgages become worthless in this country, 

 the Government obligation will have little or no value. The Farm 

 Loan Bonds, based on such a security, ought soon to become very 

 popular with the investing public, and hence ought to supply to the 

 farmer the necessary funds for his investment needs at a rate of in- 

 terest that would compare favorably with industrial undertakings that 

 finance their fixed investments through long-term bonds. 



Up to the present time the Federal Land Banks have sold that 

 portion of their bonds not taken by the United States Government, 

 through selling syndicates made up of the leading bond houses of the 

 country, but a sufficient number of the bonds have not been sold to 

 make possible the continuous operation of the system. With a well- 

 organized sales force, the Federal Land Board might act as a syndicate 

 manager of future selling syndicates, including the leading bond 

 houses, mortgage companies, and the member banks throughout the 

 country. Under this plan each offering of bonds would be sold 

 through the organization of a national selling campaign that would 

 carry the appeal to every investor in the land. This would not only 

 insure the rapid sale of the bonds, but would make possible their dis- 

 tribution at the lowest underwriting cost consistent with good service 

 on the part of the distributors. And, as Mr. George Woodruff said 

 in his address before the convention of the American Farm Bureau 

 Federation at Atlanta, Georgia, "In order that Farm Loan Bonds 

 might enjoy a continuous and broad market it might eventually be 

 deemed wise for the Farm Loan Board to list them on the principal 

 exchanges of the country, as was done with Liberty Bonds, and their 

 popularity as a medium for safe investment of the savings of the 

 people should ultimately become second only to that of the bonds of 

 the Nation itself." 



With the Federal Land Bank Act thoroly Americanized and 

 developed along the lines I have been talking about, we will have 

 an institution rivaling, if you please, in grandeur, strength, and ability 

 to serve along its particular lines, the greatest financial institution 

 ever established in the world for commercial purposes, namely, the 

 Federal Reserve Banking System. With these two banking systems 

 in the country, properly functioning, I do not believe there will be 

 any need for an intermediate financial institution to care for the 

 so-called two- and three-year paper that we hear so much talk about 

 in political circles. 



