South Bend news-times. (South Bend, Ind.) 1913-1938, 1914-05-13
NATIONAL FARM
LOAN BODIES TO
ASSIST GROWERS
Measure That viii Permit of
Loans on First Mortgages is
introduced in HOuSe-HaS
Approval of President.

WASHINGTON. May Is. - The
farmers credit bill. designed 10 make
easier the borrowing capacity OF agri-
culturists on producing land and to
encourage land owning over tenancy.
was presented 90 the house Tuesday
afternoon by Rep. Rulkley Of the
house banking and currency commit
tee.
This legislation is being urged by
Pres. Wilson. The bill is presented
without the endorsement OF the house
committee which has been working on
the legislation for months. but has
failed TO reach an agreement. Later
il viii be made the subject OF spe-
cial democratic caucus to insure votes
for it's passage
Under the provisions OF the tenta-
tive bill the government is authorized
To issue special farm loan bonds, bear
ing five per cent interest 10 the ex-
tent of S5.OOO.OOO "A year. the issue 10
he controlled by the federal reserve
board
In the elaborate scheme for the ad-
ministratiOn OF this new financial sys-
tenn for the country, il is provided
that national farm loan associations
are TO be organized. each TO have not
shares of not less than $2j.
Loans on Mortgages.
These associations are authorized TO
make loans of currency funds secured
by first mortgage on farm lands with
I'm the farm loan district TO be sup
piled by the associations; to buy and
sell from any other farm loan aSSO-
Citations endorsed first mortgages: TO
buy and sell farm loan bonds and
United States bonds: To buy and sell
lands acquired in satisfaction of debts.
or purchased az sales under judg-
ments. DEGREES or mortgages held by
them.
No loans are TO be made except on
first mortgages, each of which must
contain an agreement for the reduc-
ton Of the face of the loan through
annual or semi-annual payments.
Mortgages shall run for at least
five years and not more than 30 years
and the loan may be paid at any in
terest payment date after the five year
period. either in cash or farm loan
bonds.
Must Need the Money.
Loans are 10 be made only to
liQuidate Indebtedness Of the owner of
the land mOrtgaged for Improvement
of farm lands, purchase of equipment
or stock. or purchase of a farm home
No loan is 10 exceed 80 per cent of
the value Of the land mort gagged and
% per cent of the value of the build
ings. nor 10 an amount I'm excess Of
$4,000 TO any one borrower
Twelve federal land bank districts
are to be established by the federal
reserve board with home offices in
cities 10 be designated by the board.
The farm loan associations of each
district are 10 unite i'm one federal
land banking association with nine
directors. three 90 be appointed by the
federal reserve board.
Each federal land bank is 10 have
100000 capital 80 per cent in cash,
the balance either cash or first mort
cages Ten per cent OF the capital
stock is to be invested in United States
bonds. The bank may not accept
general deposits or do a general bank
ing business.
To Issue Farm Bonds
Farm loan bonds are to be issued
in denominations of S100, $500 and
81 900 in series of not less than $780,
00O their terms To be fixed by the
federal reserve board. The creation
OF a reserve fund is provided to be set
apart TO meet any losses incurred
through nOn-payment of principle or
interest on the loans.
The banks loan associations capital
stock. reserves. surplus and bonds are
TO be exempt from federal. state and
Local taxation.
Postal savings may be invested in
farm loan bonds
Rep. Bulkley made this statement
on the effect of the bill.
1T makes land mortgage security
available for investment in national
market. The proposed bonds will be
adequately protected by the hypothe-
cation OF mortgages. the endorsement
OF the respective local associations. the
responsibility OF the land bank issuing
the bonds. and the guarantee of all
the other land banks"