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Interest.--The legal late of interest is 6 percent. Any rate not exceeding 12 percent per annum, agreed upon in writing, is valid. All State warrants draw .5 percent; all county, city, and school warrants draw not to exceed 8 percent, and the public officers whose duty it is to issue warrants shall each month investigate the market value of warrants and fix the rate of interest on the same during the -ensuing months. Any interest contracted for over 12 percent is usurious, but contract not void. In action only principal recoverable, less the amount of interest accrued as con-tracted for, and costs. If interest has been paid, judgment for principal less twice the amount of interest paid and less accrued interest.
Interest.—Legal rate is 6 percent. Corporations may make special contract for a greater rate. Excess of interest above 6 percent, if usury is pleaded, except in the case of corporations, cannot be recovered. Small loan companies, licensed by the State commissioner of banking, may make loans up to $300 under certain conditions, and charge therefor interest not to exceed the rate of 3% percent per month on the first $150 or remaining balance thereof, and 2% percent on the balance up to the $300 limit. (See Acts of Legislature, 1933).
Interest.—The legal rate is 6 percent; maximum contract rate, 10. Usury (except in bottomry and respondentia bonds) forfeits the whole interest if not yet paid; if paid, treble the unlawful excess may be recovered by suit within a year.
Interest.-In the absence of express contract, all moneys, claims, or judgments draw interest at the rate of 7 percent per annum. Any rate may be agreed upon in writing, not exceeding 10 percent per annum. If any greater rate is agreed upon the lender forfeits all interest. Unsettled accounts draw interest after 30 days from the date of last item.
Mr. PACE. The highest legal rate of any State appears to be 8 percent. Most of them are 6 percent, and a few of them are 7 percent. If that were enacted in the bill, as I understand the language, that would mean that in the State where the legal rate is 8 percent you would not be authorized to make a loan if the applicant could secure money at that rate. Mr. HANcock. From my personal experience, the trouble has been that whenever you fix by law the maximum rate of interest it always becomes in practice the minimum rate of interest. Mr. WooRHIs. Will the gentleman yield? Mr. PACE. Yes. Mr. Voorhis. I just wanted to point out that I believe what Mr. Pace is talking about is the rate at which the man must be able to get a loan elsewhere. Mr. PACE. That is correct. Mr. WooRHIs. You are not talking about the rate at which Mr. Hancock's loan will be made? Mr. PACE. No; but in order to become eligible. Mr. WooRHIs. But not the rate at which he would make it. Mr. PACE. No. Mr. HANcock. I think a fair and proper interest rate under this bill would be 4 percent on tenant purchase loans and 4 percent on R. R. loans. Mr. FLANNAGAN. You think the rate should be uniform; do you? Mr. HANcock. Yes; I do.
Mr. PACE. Of course that does not take into consideration one thing that is usually considered; that is, the nature of the risk. The production loan, which would be a greater risk, might have to bare a slightly higher interest rate. Mr. HANcock. The question of risks is not the criteria followed in making our loans. Our loans are made available to those lowincome farm families who want and need this assistance so they can help themselves and who cannot obtain adequate credit on reasonable terms elsewhere. I have never taken the position that a man who wanted to own a farm and thus provide a home for his family should pay a higher rate of interest than a man who wants to peculate in the market or for other similar operations. Mr. PACE. And neither have I. Now, Mr. Hancock, I believe it will be necessary for the committee to review the question of the abolition of the R. A. C. C. or else put in some emergency legislation to take care of situations which have been described to us out in the State of Washington. Mr. HANCOCK. I agree with you. And I think it can be done by using the same language as you used in the Seed Loan Act. Mr. PACE. That is what you recommend? Mr. HANcock. Yes, sir. Mr. PACE. From the standpoint of securing the enactment of this. bill by the Congress I believe it will be necessary to have some very definite language in the bill, a very definite statement to the Board or the Administrator regarding the seed and feed loans. I find that there is an almost universal admiration of the record of the seed and feed loan. Mr. HANcock. And I understand it has been warranted. Mr. PACE. Of course this bill comprehends loans which include the seed loans and other loans of a production character. I am wondering if, for the purpose of securing an agreement between those who have such a profound interest in the activities of the Feed and Seed Loan, whether you would suggest any modification of the language of the bill. Mr. HAN.cock. I think we can carry on the activities of the Crop and Seed Loan Agency under the terms of the bill as it is now written, and render substantially the same type and character of service that they are now rendering—assuming that we have some of their talent. Their loan, of course, is on an annual basis, and it is primarily to provide seed, fertilizer, and some labor, and it is comparable to the annual recurring expense portion of the Rural Rehabilitation Loans. I see no reason in the world why we cannot carry them on together under the terms of this bill as you have drafted it. Mr. PACE. As I mentioned before, I understand that all of their employees are civil service employees. Mr. HANcock. That is my understanding. Mr. PACE. And if that agency should be discontinued, those employees would be thrown out of employment and lose their retirement rights, you might say. It has been my hope that it could be found possible to move that organization into o organization if this bill is enacted, in order that those men may be taken care of. Mr. HANCOCK. So far as we are concerned, Mr. Pace, we are perfectly willing to accept o responsibility that the Congress places. upon us, as I tried to make clear earlier. Mr. PACE. That is all I have to ask.
Mr. HANcock. Mr. Chairman, apropos of the question that Congressman Pace asked yesterday, which goes somewhat to the heart of this bill, may I insert in the record at this point the testimony of Dr. M. L. Wilson, who is Director of the Federal Extension Service, before the Agriculture Subcommittee of the Committee on Appropriations on the agriculture appropriation bill for 1943, with respect to turning over our supervision and servicing functions to the Extension Service?
Mr. FLANNAGAN. It may be included at this point, if there be no objection.
(The matter referred to is as follows:)
STATEMENT BY M. L. WILson, DIRECTOR of ExTENSION SERVICE AT HEARINGs. BEFoRE THE AGRICULTURE SUBcom MITTEE of THE CoMMITTEE on APPROPRIATIONS FOR 1943
Mr. WILson. * * * I am glad, Senator, that you brought out the question here of the relationship between the Extension Service and the Farm Security Administration because I feel that in every way
NO DUPLICATION OF EFFORT BETWEEN EXTENSION SERVICE AND FARM SECURITY ADMINISTRATION
Senator RUssFLL. I asked the question, because it has been intimated—not only intimated, but stated, that there was tremendous duplication and overlapping in fields and activities of the county extension agents and the Farm Security agents. Senator RUssFLL. They graduate from the intensive supervision they have under the Farm Security to a position and status to where they will be able make it on their own with the assistance that the county agent is able to give all of the farm families of the county.
Dr. WILsoN. I do not see that, Senator. I see the extension program as being the over-all educational program. It touches all farmers in the country. It has the entire program for agricultural betterment of the country, and then for these low-income people, who have the rehabilitation loans, I feel that they need this individual help month by month. That work is done much better if that is tied in with the loans. The Farm Security agents supervise the rehabilitation loans and other part of the work that is connected with them. There is no duplication. The two support each other. They get along very well.
COUNTY AGENTS CANNOT TAKE OVER WORK NOW PERFORMED BY OTHERS WITHOUT: INCREASE IN NUMBER OF COUNTY AGENTS
Senator RUss ELL. Do you think it would be possible for the several county agents to take over and perform the intensified duties in connection with the service in their counties and maintain the work that they have at present? Senator BANKHEAD. In other words, do the work of both agents? Dr. WILson. It would take just that many more extension agents to do it. It would take that amount of manpower, there is so much work. Senator RUSSELL. The question was, Could the existing county agents in addition to their duties they now have to perform also perform all of the duties of Farm Security supervisors? Dr. WILson. They could not, Senator. The county agents, both the man agent and the home demonstration agent, and the 4-H Club agent, where there are club agents, are overworked now.
HEAVY CASE LOAD OF FARM SECURITY SUPERVISORS
Senator RUssFLL. Is the same thing comparatively true with respect to the Farm Security supervisors whom you have observed? Dr. WILson. Yes; I think so. I find the Farm Security supervisors have a heavy load. It is the personal touch; this personal supervision; this getting to the farm and educating that farm family on the particular point at the time it is to be done that is important and I am convinced too, that you will see as the
Farm Security goes along that that intensive kind of education either makes the
family in 3 or 4 years or else there is evidence there that the family cannot make it, one or the other. If they do not respond and move up in response to this educational procedure then, well, they just simply are not the kind of folks. If they do, then they move up, so that the Farm Security process here is helping that kind of family move up each year.
Dr. WILson. They graduate them over to the county agent.
Mr. HANcock. I might say that Dr. Wilson's position states more clearly my position than I could state in my own words. Mr. McCord. You made reference in your statement to the recommendation that the state offices set up be continued until the end of the war, but you make no statement as to the regional offices. But it is your recommendation that the regional offices be continued at the present time? Mr. HANcock. That is correct—and especially during this emerenCV. g §. PHILLIPs. Mr. Wickersham asked Mr. Hancock as to his position as to the selection of doctors. Mr. HANcock. They can select any doctor in the community who is a participating member of the medical-care program. Mr. WooRHIs. In other words, the panel approved by the Medical Association? Mr. HANcock. All of these medical-care associations are established with the approval of the State and county medical association, and also with the consent of the doctors in the community. Mr. FLANNAGAN. If there are no further questions, then the committee will adjourn until Wednesday of next week. (Whereupon, at 12:40 p.m., the committee adjourned.)
FARMERS' HOME CORPORATION ACT OF 1944
MONDAY, MAY 15, 1944
Hous E of REPRESENTATIVEs,
The committee met at 10 a. m., Hon. John W. Flannagan, Jr., presiding.
Mr. FLANNAGAN. The committee will be in order.
The committee has under consideration H. R. 4384, the bill introduced by my colleague, Mr. Cooley, to simplify and improve credit services to farmers, and so forth.
Our witness this morning is S. Paul Lindsey, Jr., Director of the Emergency Crop and Feed Loan Division, Farm Credit Administration.
You may proceed, Mr. Lindsey.
STATEMENT OF S. PAUL LINDSEY, JR., DIRECTOR, EMERGENCY CROP AND FEED LOAN DIVISION, FARM CREDIT ASSOCIATION
Mr. LINDSEY. Mr. Chairman, and gentlemen of the committee: Loans of the type authorized by the act of January 29, 1937, first became a Federal activity during World War I by the allocation of funds available to the President to be loaned to farmers to increase production of foodstuffs. These loans were made wholly in the wheat
producing areas. The first congressional authorization for such loans was in 1921, and was confined to certain agriculturally distressed areas. In some years following 1921, until 1931, Congress authorized loans for crop-production purposes, limited to designated distressed areas as specified by Congress. Due to drought and general economic conditions the loan was made on a Nation-wide basis in 1931 for the first time. Thereafter in each succeeding year Congress specifically both authorized and appropriated funds for each calendar year until 1937. In that year an act was passed authorizing an appropriation of $50,000,000, which sum was appropriated. The following year the act was made a continuing one by joint resolution. Thereafter in the administration of the act we submitted an estimate to the Bureau of the Budget and to the Congress of the amount of money needed to make the loans for the ensuing year. Consequently, each year, beginning in 1938, the Farm Credit Administration has placed its estimates and received Congressional authorization for the use of moneys for the making of crop production and harvesting loans and for the payment of expenses. As of December 31, 1943, there had been made under the above appropriations 3,901,373 loans, amounting to $451,976,734. Of these