Abstract
The experience of twenty-one years lies behind us in the field of cooperative mortgage credit. A study of this type of credit, as administered by the Federal land banks of the country under the varying economic conditions of the past, should enable us to fairly evaluate the accomplishments of the system. The Act under which this system was created has been amended from time to time as experience has disclosed weakness or omissions. Constant effort has been put forth to make the system genuinely responsive to the credit needs of agriculture by providing through the Federal land banks a dependable and usable source of capital credit in periods of prosperity and economic adversity. The purpose of this discussion is not to analyze the rather complex structure of the Federal Land Bank System but rather to consider just one of the functions of an essential part of that systemthe servicing of loans by the national loan association. This local association has other important functions as well, thereby making it impractical to attempt to consider the servicing of loans by an association in terms of a detached operation. Rather, it seems logical to consider this one important function in connection with all the operations of the national loan association as an essential, integral part of the land bank system. The Federal Farm Loan System was not created as a measure of farm relief, as we now use that term. Farmers were facing no great crisis nor were they oppressed by an exceptionally cumbersome burden of debt. On the contrary, farmers were enjoying a period of rising prices and prosperity. The agricultural credit movement in its inception was simply one of the steps by which agriculture moved from the position of a self-contained domestic economy which needed little capital to a commercialized exchange economy requiring large amounts of credit. The need for a satisfactory type of mortgage credit was a natural and normal result of changing conditions in land tenure and of the modern conception of the use of capital as applied to agriculture. The Federal Farm Loan System was a new departure in American finance. There was no background of American experience upon which to build. Principles, policies and procedure all were to be defined and developed. National loan associations have no exact counterpart either in European or American financial institutions. It is safe to assume
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call