FCS Financial: One Hundred Years July 2016 | Page 22

Henry Morganthau Jr., one of the president’s primary advisors who went on
to become Secretary of the Treasury, and convinced him the farm mortgage
situation was critical. Courts in county seats all over the country were clogged
with foreclosure suits. Working together, Morgenthau and Myers developed
the framework for the Farm Credit System. By bringing together the various
government agencies involved in agricultural credit, Myers developed a
framework for a cooperative credit system that would become part of FDR’s
emergency farm relief program.
Just three weeks after his inauguration, President Roosevelt issued an
executive order establishing the Farm Credit Administration on March 27,
1933, which would supervise all the functions and funds of existing
agricultural credit organizations. That was the first step. Two vital pieces of
legislation followed. The Emergency Farm Mortgage Act of May 12, 1933,
offered direct relief to farmers who were delinquent on their loans. It extended
repayment schedules, reduced the interest rate to 4½ percent on all Federal
Land Bank loans for five years, and offered emergency financing. The following
month, the Farm Credit Act of 1933 was signed into law on June 16. With its
passage, the Farm Credit System was now complete.

A group meeting held in
1930. Pictured are long-time
member Jay Shipley’s parents.
His mother is in the back row,
second from left and father is
back row, third from left. The
blur seen next to Mrs. Shipley
is Jay’s sister who was born
shortly before this meeting.

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The Farm Credit Act of 1933 called for the creation of Federal Land Bank
Associations for issuing long-term agricultural real estate loans under the twelve
Federal Land Banks. Likewise, local Production Credit Associations would be
created to issue short and intermediate-term loans to agricultural producers out
of funds provided by the twelve Federal Intermediate Credit Banks.
These Production Credit Associations were to be locally organized,
chartered and supervised by federal authority, and originally capitalized with
government funds, both provided through the District Production Credit
Corporations. In keeping with the tenets of cooperatives, farmers would help
capitalize their local associations by purchasing “B” stock in amounts of $5
for each $100 borrowed. Each member/borrower was limited to a single vote,

Selected References