Statement by the President Commending the Operations of the Federal Farm Mortgage Corporation.

THE CHECK for a million dollars which has just been handed to the Secretary of the Treasury by the Governor of the Farm Credit Administration has a special significance for our farmers, and for all Americans. It brings to a total of $100 million dividends earned on a sum twice this amount advanced to meet a crying need for farm mortgage credit.

Back in the dark depression days of 1934, which many of us have now forgotten, Congress provided $200 million to capitalize the Federal Farm Mortgage Corporation and gave it authority to borrow up to $2 billion for use in making emergency farm mortgage loans. This was the period, you will recall, when farmers were engaged in a desperate struggle to hold their farms. Incomes were extremely low and group farm income was only $8 1/2 billion in 1934, compared with $32 billion in 1950. Thousands of farmers were then losing their farms by foreclosure.

Over the years the Corporation made 679,000 loans to farmers for over one and two-tenths billion dollars. A large portion of these loans were used to refinance farmers who were overloaded with debts. These loans helped save the homes and farms for hundreds of thousands of farmers. This refinancing also helped to unfreeze the assets of many local banks and insurance companies and made a distinct contribution to putting our economy back on its feet.

This Government Corporation has paid all its operating expenses, it has paid interest on all money it borrowed and met all losses on loans from its earnings. It has been of no cost to the Government. It has also returned to the Treasury the original Government capital investment of $200 million except for $10,000. This nominal amount remains outstanding in order for the Corporation to hold its charter long enough to wind up its outstanding loans.

In addition, the check that has just been handed to the Secretary of the Treasury, John W. Snyder, by Governor I. W. Duggan of the Farm Credit Administration, brings the dividend payments made by the Corporation to the Treasury to a total of $100 million. Secretary of Agriculture Brannan tells me the Corporation still has assets, most in the form of loans to farmers that are not yet due, that will probably result in additional dividends of as much as $30 million.

We take pride in this Government institution's success in helping farmers weather an economic storm. We take pride in the way farmers and ranchers have lived up to our faith in their integrity and ability to rise above difficulties when given the opportunity.

The lending operations of the Federal Farm Mortgage Corporation were conducted by the cooperative land bank system, which at the same time was quietly and effectively going about the business of making much needed low-rate land bank loans to farmers. I might add that every dollar of Government capital that has been put in any of the farm credit banks or corporations has either been repaid or is intact and unimpaired and each of the banks and corporations has substantial reserves and surpluses.

The land bank system is deserving of our warm commendation. On behalf of all Americans I wish to thank the Secretary of Agriculture, the officers and employees of the land bank system, its farmer members, and the officials of the Farm Credit Administration under whose supervision the loan program was so successfully administered. It is heartening to know that long-term, low cost farm mortgage credit to meet farmers' needs continues to be supplied on a sound basis by the farmer-owned Federal land bank system.