Tanselle car blown 300 feet from Elm Swamp Road to fence row against trees. Tanselle and woman companion were injured but survived. A girl was blown from the car and a search had to be made for her as she screamed for help. Showing all that is left of Robert Lafollette's 261⁄2 x 21 picturesque 3-story home west of Dover community. The death toll in Boone County now stands at 23 persons with others still not out of danger from injuries received from the tornadoes. I also submit to you that the average insurance coverage on the total property damage is less than 50 percent. We realize that so much of the property damaged was not insurable, such as fences and wells, which in some instances were pulled from the ground, various utility facilities, trees, shrubs, and so forth. In many cases, all livestock and machinery were lost; these two items alone were carrying tremendous chattel mortgages and now they have nothing to offer for security. May I respectfully emphasize that the one very neglected area on the Federal level is that it is virtually impossible for our family farmers to qualify or be considered eligible for Farm Home Administration 3-percent disaster loans. Yet, we are told that they can qualify for 3percent short-term loans for this year's crops only. The fact is that these farm tornado victims sorely need Farm Home Administration 3-percent disaster loans, for refinancing existing indebtedness on chattels as well as real estate mortgages. I have submitted to you along with my remarks a transcript of a disaster meeting which I called shortly after the tornado and which contains actual testimony from two very typical farmers who were hit by the disastrous tornado. It is not uncommon for a young farmer who owns and manages a typical Midwest farm to have chattel mortgages on livestock and machinery of $40,000 to $60,000. They are obligated to these chattels from banks and other farm lending institutions with interest rates from 512 to 612 percent and, needless to say, this interest continues to grow. I refer you to the Farm Home Administration Bulletin No. 441.2 under section 8 (j) which disqualifies the Hoosier family farm disaster victim from receiving 3-percent disaster loans, wherein it states that— initial emergency 3 percent loans will not be made to applicants whose credit needs can be met with another type of Farm Home Administration loan. Our young farmers today cannot possibly meet our Nation's production demands of tomorrow if they are not permitted, in cases of disaster, to refinance existing indebtedness at a rate of interest less than the prevailing interest rates, with perhaps interest and principal moratoriums, until they are able to undergo the tremendous expense of rebuilding and restocking their farm operation. I, along with all the citizens of Indiana, wish to commend you for your conscientious and sympathetic ear to our problems, and stand ready to give you any additional information that you might deem necessary to determine whether Senate bill 1861 should be passed by the 89th Congress just as quickly as possible, to ward off the possibility of loosing many young Hoosier farmers from the farm, who were left. helpless from the ravages of the Palm Sunday tornadoes by financial destruction. I would like to reemphasize, Senator Bayh, that to me, this Senate bill 1861 is about as vital as anything that we in our stricken area could have as a vehicle, and we do need it soon. I am fearful that by the year's end, with these farmers having the tremendous chattels, nothing to show for their security, and then they are forced to go out and borrow additional money at a high rate of interest, or at the prevailing rate of interest, and simple mathematics tells us that these farmers cannot dig out of this. They are headed for financial ruin unless we can get some refinanical possibilities. This seems to me to be the one big answer, to refinance the one word-refinance existing indebtedness at a 3-percent rate, therefore consolidating everything, getting the creditors off their backs, improving the economy of their community, because you must realize that many of these lending institutions and banks are carrying these people, but they have no way to stop the interest from building and building. So this is sorely needed. (The transcript submitted by Mr. McCormick follows:) TRANSCRIPT OF PROCEEDINGS OF BOONE COUNTY DISASTER REPRESENTATIVES AND AGENCIES (Held on Monday, Apr. 26, 1965, in council room, Municipal Building, Lebanon, Ind., State Senator Keith C. McCormick, presiding) ROSTER OF PARTICIPANTS George Cox, Farmers Home Adminis- Mrs. Eunice Hopkins, Secretary-Mantration H. Roy Martin, attorney John Robbins, Soil Conservation Office Andrew Houk, civil defense ager, Lebanon Chamber of Commerce Ned Boatright, chairman, Boone County Eugene Higgins, cashier, Citizens State Bill Russell, chairman, Salvation Army Winfred Kincaid, Agricultural Stabili- Rev. John Washler, pastor, Assembly of zation Board Joe Robinson, county agent James McConnaha, sheriff, Boone Hassil Schenck, Lebanon God Church Stacey Cox, county commissioner Bob Maze, county commissioner trustee Don Roche, Adams Township trustee Garnett Jones, civil defense Senator McCORMICK. Since the tragic Palm Sunday disaster there have been many, many people working night and day trying to find a solution to the problems the tornado victims are facing today. As you all know, there has been a special legislative disaster relief committee, appointed by Governor Branigin, of which I am a member. This committee will be meeting Wednesday to decide if a special session of the legislature is warranted in order to aid these people affected by this disaster, and any other disasters that the future might hold for us. I might say that I am on record as a legislator, and a member of the committee, that if a special session is deemed necessary, we have a 1-day session. If limited to 1 day, I feel that with meetings such as this one tonight, and proper study, we will know what we have to do and the majority of the legislators will be prepared to do so. I feel that there would not be any appreciable extra expense to the taxpayers because we have personnel that are trained and who are still working in the State house. Their office routine could be changed for this one day, and I am sure that we could accomplish our purpose. I certainly am not here to tell you what I think should be done. All members of the legislative disaster committee are having meetings such as this one tonight and compiling all information possible. I, like the other members, am vitally interested in what I can obtain from this meeting so that I may in turn give the study committee an idea of what is happening here in our area. I think that now is the time to act; I think now is the time to find our solution for this situation and any future ones with which we might be confronted. 49-751-65-11 I would like to present our first speaker of the evening, Mr. George Cox, of the Farmers Home Administration. I think George has some information just received that will be of interest to all of us. Mr. Cox. It is never a good idea to start out a talk with an apology. In this case I have put out quite a bit of publicity about the 3-percent disaster loans which are available from our agency; and I hate to say it, but we are not going to be able to do what I told you we could for the family-size farmer. We have have said 3-percent loans would be available for household contents, machinery, livestock, and replacing buildings. Three-percent money is only available for crop expenses and up to $2,500 for other purposes on a 1-year repayment schedule. Credit is available to disaster victims only if they are unable to secure loans elsewhere, including our regular FHA loan programs. Regular FHA operating loans can be obtained at 5 percent under the amount of $35,000; over $35,000 the individual becomes eligible for a 3-percent loan. A part-time farmer is compelled to take the 5-percent loan. Senator MCCORMICK. This is true even though this has been declared a disaster county? Mr. Cox. Yes. Washington brought us up to date a 4-percent loan to replace buildings to anyone, and we can take a second mortgage with real estate loans for building construction. A regular 5-percent real estate loan is available to refinance debtors, buy real estate, and so forth. In order to receive any FHA loan the individual has to be turned down by other lending institutions. Keith and I are toying with the idea of talking to Washington to discuss it by phone. Mr. MARTIN. What actions has Senator Bayh taken? Senator MCCORMICK. He has a bill readied for presentation, but I do not know the status of the bill. Mr. Cox. To sum it up, FHA emergency credit is available for 1-year operating expenses. Our regular FHA loans are available for second mortgage real estate loans-operating expenses, machinery, livestock. We will work with local creditors and take over credit needs when their limits are expended. The 3-percent emergency loan is not available to the family-size farmer other than for current year crop expenses. Mr. LAFOLLETTE. Is a 3-percent loan available in excess of $35,000? Mr. ROBBINS. Three percent on operating expenses? Mr. Cox. On operating expenses; on a 1-year basis when crop is sold. Mr. JOHNSON. George has answered my questions on 3- and 4-percent loans. We have had customers in asking about the 3- and 4-percent loans and have not been able to tell them anything. I am going to work with them as far as banking laws are concerned. The Home National Bank can only loan a certain percent. We don't take second mortgages and George has answered that. Now I can talk with our customers and advise them of this information. Mr. WALTERS. I spent the afternoon in the State treasurer's office. I don't know what I was expecting. There will be no relief from banking regulations and I can understand why. The banks are responsible to their customers. As far as this $1 million that was deposited, this was primarily put in the bank in anticipation of the decrease in deposit volume. We can make it available at a lesser interest rate than it can be loaned otherwise-no 6 or 8 percent. There could be 5-percent disaster loans which must be bankable. This is the problem of loaning to farmers already in debt and whose property has been destroyed. As far as being bankable, no loan can be made when the collateral is gone. We will lean as far as we can, but it is a problem to know just how far to go; just where to draw the line. Something is going to have to be done to get even with the board and then follow steps and get started off again. They have nothing on which to borrow except real estate, and many don't even have real estate. We don't know what to do with the $1 million and I asked the Deputy Treasurer if this was for 10- or 15-year loans. He advised that it was not; it was for immediate expenses. Mr. HOUK. If a man has everything gone and a bank has no collateral, this automatically qualifies him for this disaster loan? Mr. Cox. Yes, at 4 percent on a second mortgage. Mr. WALTERS. We intend to work with George in this matter. Anyone having a mortgage should have enough insurance to cover the loss. |