Franklin D. Roosevelt

Message to Congress Recommending Legislation on Farm Mortgage Bonds.

January 10, 1934

To the Congress:

I have already suggested to the Congress that one of our tasks, in the light of experience, is to improve and perfect previous legislation.

I now recommend that the Emergency Farm Credit Act of 1933 be amended to provide responsibility by the Government for the payment of the principal of, as well as interest on, bonds issued.

Two billion dollars of bonds were authorized. While the interest was guaranteed, the ultimate obligation of the Government for payment of the principal was not legally assumed. We should supplement what most of us frankly believe to be the moral responsibility of the Government by adding the necessary legal responsibility. The result of providing a bond on which both the principal and interest are guaranteed would be to put such bonds on a par with Treasury securities.

By setting up a corporation to issue these bonds, the important task of refinancing agricultural indebtedness can be continued on virtually a self-sustaining basis.

The Farm Credit Administration is expediting the disbursement of funds. In order that progress in making loans may be uninterrupted, I hope that the Congress will give attention to this subject as soon as possible.

It is true that technically the responsibilities of the Government will be increased by the amount of $2,000,000,000.00, but it seems in every way right that we thus publicly acknowledge what amounts already to a moral obligation. In any event, the securities to be offered are backed, not only by the credit of the Government, but also by physical property of very definite value.

Franklin D. Roosevelt, Message to Congress Recommending Legislation on Farm Mortgage Bonds. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/208588

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