The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-04-26
KANSAS IS IN LEAD
This State First to Adopt Rural
Credit Plan.
Association Organized With
EmpOria Headquarters.


put into force the rural credit plan
that has been urged as the proper
method of giving the farmers the
credit they need for the buying and
the development of farms.
The charter board this morning is
sued a charter to the Kansas Rural
! Credit association, with headquarters
at Emporia. This is the first associa-
| ton to be organized in Kansas and the
| first association to take advantage of
the investigation and report of the ex
pert commission on rural credit ap-
pointed by President Wilson.
The charter provides for capital
stock of 100000. The association Is
chartered for the sole purpose of max
| ing loans to it's members who are it's
stockholders. The members will be
Kansas farmers who will be able to
borrow money at per cent, or less,
/ to be paid off on the amortization
plan, amortization meaning simply
the payment of a small portion of the
principal at each interest paying per-
iod. The borrower gets credit for
| these payments and by the compound
ing of interest upon them gradually
the principal of the loan is wiped out.
! The incorporators named in the ap-
plication of The Kansas Rural Credit
association are Senator w. NJ. Price,
president of the Lyon County State
| bank, Emporia; Owen Samuel, a
prominent attorney at Emporia and
three terms county attorney; L. w.
H. S. Morgan, Topeka.
The charter of the association pro-
vides that loans will be made for diff
| ferent periods from ten to 35 years
land, to make permanent improve
ments or pay off existing debts. No
stockholder is allowed to own or vote
more than per cent of the capital
stock which means that a few can not
control the association.
1.-The issuing of charter to The
Kansas Rural Credit association
means that Kansas is to be the first
state to take advantage of the fine
work done by the national commits
sion appointed by President Wilson, in
1913, to investigate rural credit con-
ditionS or the way in which European
countries solved the question of an
independent financial system to meet
the requirements of the farmers said
Mr.. Moody, who has been the leader in
the organization of the association.
THE commissioners spent three
months in studying the conditions in
all European countries. In it's report
to congress this commission pointed
out that associations somewhat SINH
lar to the ones in successful operation
in all European countries could be or
ganized in the different states of this
country
1.-The underlying principle of all
European farmers credit systems is
that many mortgages are taken and
bonds issued against the collective Sc
curity of all of them. The commission
pointed out that this could be done
equally well by organizations con-
filming their business to one state. The
commission also recommend federal
legislation which would allow these
organizations to be made under fed
eral charter and Incorporated in the
proposed law certain restrictions re-
garding the issuing of bonds which
would make them high class invest
ment security.
For instance, no organization
would issue bonds for more than fiji
teen times it's capital and surplus. The
bonds must be protected by an equal
amount of mortgages and administra-
tion charges must be covered by 1
per cent All of these limitations will
be strictly adhered to by the Kansas
Rural Credit association. In addition
the entire capital stock of the associa-
ton will be invested either in gov
ernment bonds or in state, county,
municipal or school bonds of the state
of Kansas, 20 be held either in banks
or by the state treasurer as a perpetu-
al guarantee of the bonds of the asSo-
citation in addition to the security to
the mortgages which are required by
law to be back of every bond. This,
it is believed, will give the bonds a
high market value. A campaign will
be made in which memberships in the
association will be offered to the
farmers of Kansas. Membership will
consist of one or more shares in the