38 FARMER UNION AND FEDERATION 



second annual report of the Farm Loan Board is declared to 

 be one of " evident progress" because of so many loans to 

 farmers, and is discussed under a Washington date as fol- 

 lows : 



"WASHINGTON, Dec. 31. Increase in the lending power of federal 

 land banks and the grant of authority for them to write fire insurance 

 on farm property were advocated by the Farm Loan Board in its annual 

 report submitted today to Congress. Modification of the Federal Farm 

 Loan Act so as to make the minimum loan $500 instead of $100, and 

 maximum loans $25,000 instead of $10,000, also was urged. 



"The report, which was the second made by the Board, was described 

 as covering ' the first year of operation ' of the farm loan system, the first 

 year of the Board being spent in organizing. The year was one of very 

 evident progress, declared the report, which contained a table showing 

 that farm loan associations increased from 1,839 to 3,439 during the 

 year ; that the capital of the twelve federal land banks increased from 

 $10,488,230 to $16,250,285 ; that loans in force increased from $29,- 

 816,304 to $140,004,439 ; that joint stock land banks increased from 

 four to nine, and that their loans now amount to $7,380,734, and that 

 interest rates on the land banks was 5 or 5J^ per cent, and that of stock 

 land banks was 6 per cent. Interesting information as to the applica- 

 tions by borrowers of loans from the banks was given in a detailed state- 

 ment, dealing with about one- third of all the loans closed by the banks. 

 This statement showed that 8 per cent of the proceeds of the loans were 

 used to buy land ; 10 per cent for buildings and improvements ; 60 per 

 cent to pay off existing mortgages ; 10 per cent for payment of other 

 debts ; 5 per cent for purchase of bank stocks ; 4 per cent for purchase 

 of livestock, and 3 per cent for implements and equipment. 'The loan- 

 ing of over $150,000,000 has been of distinct and direct benefit to more 

 than 64,000 borrowers,' declared the report, 'and has been of indirect 

 benefit to every applicant for a farm loan through private agencies. 

 While the loans made by federal land banks in the last year probably 

 represent only about one-eighth of the total loans made by all agencies, 

 they are far greater than any other single agency. Another illustration 

 is therefore afforded of the truth that a market can be usually controlled 

 by one large buyer or seller, if all the rest of the buying and selling is 

 split up into small lots.' Despite the large production and high prices, 

 net returns of agriculture in the 1918 crop year 'was much less than is 

 popularly supposed,' declared the report, which explained that big 

 profits were eliminated by the scarcity of farm labor, its high cost, as 

 also that of fertilizers, implements and machinery." 



