Lower coast gazette., 1913-06-14
cENTRALIZES the security, supervision
and management of land credit. hor
ATTRACTS the funds needed 70 mee' w

MOBILIZES all mortgages as a oasis lof ao- y
,olutely safe investment bonds.
PAYS OFF the mortgage almost without tne
borrower feeling it. =
(a) The borrower gives his note 1oI a lons \
-erm of years, and agrees to pay the interest,", p
10 of | per cent annually for expenses, ana 10 S
reduce the principal by paying not less IMAM q
| per cent thereof each year amortlzatonl
These three items constitute tne annuity ne !,
harrouor navs. It is believed that the total =
onnn;tv thus paid by the borrower need not
axcead the average rate of interest alone now
Maid vet that the earnings will be sufficient 10
wine ont the principal of the debt IN from ~
IN 40 wears. For instance, it interest IS 4H2
ner cent. expenses "a of l per cent and amort.
zation | per cent, making a total OF 3 per cent
annually. then the semi-annual payment OF 9oo
will nav off 81, 900 in 40 years, including all ~
terest and expense charges meanwhile; ana tne
farmer may reduce his debt more raploly-n
he so desires. The note is secured by a mort
gage covering the borrowers fafm' upon oil
ample margin of safety. oaos
III Upon the security of such mortgages,
bonds are issued by the land bank IN small or
large denominations. These bonds are SOLD TO
the nublic. Thus the land bank obtains the
money which it loans to borrowers.
lei The rate of interest required OF Doirow,
ers is comparatively low, and the interest," yleiu
of these farm-mortgage tax-tree oonus - ~
respondingly low, but the whole matIer ~ ~
comparatively and efficiently ORGANIZED, man.
aged and publicly supervised tnat EXPENSES =
ard eliminated and these securities vie with gov
ernment bonds in popularity, STABILITY and sta
hilitv as the safest form of investment.
Let the national law be so amended that one
land hank NAV be conducted hereunder IN eacn
state. American and foreign experience proves
the wisdom of combining the land bank 10 the
State within which it is domlclled.
Each land bank must have available at all
times, in cash or absolutely liquid securitles-con,
vertib]e into cash, a land reserve equal to not
less than 5 per cent of the banks outstanding
honds. This land reserve is the i%nvlolate, per-
manent capita] of the land bank. 1t IS repre-
sented nv land reserve certificates. THESE Ger.
t;6cotes should be free from all taxation Oh
every nature and description, mctudan9 Tree
dom from death duties or inheritance taxes.
The bonds sold by the land bank, secured py
the mortgages it holds upon farms cui1lVa1eup W
their owners, should be free from all Taxation
ercept death duties OF inheritance TAXES.
The land itself is taxed; to again tax us paper
Observation-Disclosures or bonds-would
hn double taxation. On the other hand, THESE
sec1rities being thus tax free, are extraorol-
narilv attractive to investors, even though pear
: inc a relatively low rate OF interest
HOW H LAND BANK OPERATES.
: Each little local agricultural cooperative ma
f +;onal hank invests Is per cent OF its capltal IN
f land reserve certificates of the land bank 1ol
Y ito state. Other national banks shall lnves'
e therein not less than ! per cent and may thus
invest not more than 5 per cent OF their capi
f tai surplus and undivided profits. The state II
n self. also other corporations and lndlvlduals
NAV invest in the land reserve, suDlect 10 lns
s trustees approval. oo.4;foo+o ha,
Each owner of a land reserve certiflcate Ia
n one vote in the land bank, Irrespective u W
amount of his holdings-one member one W..
Thus the land bank is strictly co-opela.,yei ca =
It - ono interest can control or manipulate II
,e Tho members elect the trustees, and the latte
x emnlov the officers who conduct the business.
or AAfter nAaving interest on it's certificates an
it bonds and accumulating a certain reserve vi
r. oycess nrofts 90 to the land reserve certlhcaee
hit on1nod hv the agricultural banks that are men ~
he bors Therefore these little co-operatlVes uI
natolv will comprise the major numDe Oh y
k. membership. ou4xooos a
er oon+od hv II the land bank issues Its own POM
Nd ~ a like amount. bearing such rate OF iheeie
and in such denominations and matarltes
m will make them readily marketable. All pan
tie and brokers may buy and sell these lana 1000, poal
lily 'l The law should provide that bonds lssueo
lch national land banks should be a legal lnvest 1ne,
his for nostal savings deposits and otheI W
"a funds. ano, land ha
ow in each state should be an imposing Ire =, :
Of structure that may be headquarters TOT AT " : !
fee auricultural and home economies ln5eresi - !
are State The rentals received should enaDle !.
hank to get it's own rent, reducing us eApeh'
nth bank to get it's own rent free, reducing It's
one nenses and increasing the profits.
one STATE LAWS.
VIII NAV be enacted by each legislature under Mh
NAV be Incorporated and conducted similar !.
:ent tls co-operative banks and one or more Il
ors hanks for each state, just as there are com ~.
rent cial banks under both State and natlon naa u =
CO. State law relating to real estate anu 81 :
the titles NAV require modification in some sc 10
eals to simplify and cheaper the processes o. 4h ~
r as gaging and foreclosure and to insure A 11le
rens neccable character of the security; AUS nJso
on .s - kLooo 1on6 n0nOS