Government Farm Loans

May 27, 1940

Report Outline
Proposed Changes in Farm Credit Policies
Federal Land Bank System
Farm Mortgage Coporation Act
Production and Other Credit
Special Focus

Proposed Changes in Farm Credit Policies

Outstanding Farm Loans by Federal Agencies

Secretary of Agriculture Wallace announced May 20 that the government would make loans on the 1940 wheat crop at an average rate of about 64 cents a bushel. The farm price had been supported at approximately that point when the Chicago Board of Trade on May 19 prohibited trading in May wheat at less than 79 cents a bushel at Chicago. The Chicago price had dropped 36 cents in less than a week, chiefly as a result of shrinkage of the foreign markets when Germany invaded Holland and Belgium. Prices have recovered a few points since they were pegged, but if the war further disrupts markets abroad the United States government will undoubtedly have to advance large sums at the fixed loan rate in order to sustain the domestic price.

Anticipating such a need for expanded government loans, Senator Byrnes (D., S. C.) has introduced a bill, endorsed by Secretary Wallace, to increase the borrowing power of the Commodity Credit Corporation from $900,000,000 to $1,400,000,000, and the bill was approved May 24 by a subcommittee of the Senate Committee on Banking and Currency. If enacted, the Byrnes bill would enable C. C. C. to more than triple the amount of commodity loans now outstanding.

Commodity credit loans are often in the news because of their direct bearing on the prices of farm products. They constitute, however, only about 12 per cent of total outstanding farm credit which has been extended by or through federal agencies. Figures for the most important agencies, as of the latest dates for which they have been made public, are given in the table on the next page.

ISSUE TRACKER for Related Reports
Farm Loans and Subsidies
May 17, 2002  Farm Subsidies
Apr. 11, 1986  Farm Finance
Sep. 03, 1941  Government Payments to Farmers
May 27, 1940  Government Farm Loans
Dec. 12, 1936  Government Aid to Farm Tenants
Mar. 20, 1935  Farm Tenancy in the United States
Dec. 08, 1932  Plans for Crop Surplus Control and Farm Mortgage Relief
Jul. 25, 1932  The Burden of Farm Mortgage Debt
Mar. 20, 1929  Plans of Farm Relief
Apr. 21, 1928  The Economic Position of the Farmer
Oct. 20, 1927  The Federal Farm Loan System
May 03, 1926  Congress and the Farm Problem
May 21, 1924  Agricultural Distress and Proposed Relief Measures
Farm Loans, Insurance, and Subsidies