The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1916-08-11

extent of per cent of the money
il desires to borrow for it's members,
same to be held in trust by the bank
Borrowers who do not have money
with which to buy stock in local loan
associations may borrow the price of
the stock as part of the loan on
their land
Each stockholder in a local associa-
| tion will be liable for the acts of that
| association in a sum twice the amount
of his stock. This, of course, is not
| a serious matter, since no man, under
| this law can borrow more than half
the appraised value of his land ex-
elusive of permanent improvements,
! plRS 20 per cent of the value Of
such Improvements, and then only or
first mortgage. In all cases, therefore
the risks will be perfectly safe and
no member of a local ass Jciation
could possibly lose anything because
OF negligence or bad mana cement on
the part of one of its members.
In case it is impossible 20 organize
a local farm loan association n a
given locality, any individual eatitled
to loan may, through agents, mike
application for loan direct to the
federal land bank in his lisirct.
Loans may be made for the follow.
ing definite purposes and for none
other:
(a) To provide for the purchase
of land for agricultural uses.
OBJ To provide for the purchase of
equipment, fertilizers and 1.-Two stock
necessary for the proper and reason
able operation of the mortgdecd farm;
the term equipment" to be defined
by the federal farm loan BOARD.
(c) To provide buildings and for
the improvement of farm land; the !
term improvement to be defnel w
the federal farm loan board.
I'D To liquidate indebto 'ness y me
owner of the land mortgagod, existing !
at the time of the organization OF the |
first national farm loan association !
established in or for the county in /
which the land mortgaged is situa: ID, |
or Indebtedness subsequently IT, |
cured for one of the purposes men
toned in this section.
No individual can borrow more than |
$4,000 or less than 500 under this |
law. All loans must run for at least
five years, and may run for fcrty |
years, but not longer. However, any |
borrower may, after five years, pay
off any remaining part of his loan on
any interest day in sums of $25 or any |
multiple thereof and thus liquidate |
the loan in less time than the mort
gage calls for.
No federal land bank or joint stock
land bank Is allowed to charge more |
than per cent and never more than
l per cent in excess of the interest 1t
pays on its land bonds. If, for ex-
ample the bank pays only 4 per cent
on its bonds, it can charge only .
per cent on the money it loans on
farm mortgage. out of this margin of
/ per cent the banks must pay all
expense of operation and set aside
certain amount for a reserve fund.
The federal land banks are not al
lowed to charge commissions or fees
for making loans except such as may
be authorized by the farm loan board,
which has complete control over all
land banks.
Each federal land bank may, after 1t
has loaned $4,000 on farm mortgages,
issue bonds to the extent of $4,000
against the mortgages, and then use
the money thus obtained to make
further mortgage-secured loans. This
process of lending on mortgages and
selling bonds may be repeated by
each federal land bank until it has
outstanding obligations equal to twcn-
ty times its capital stock. Thus a
federal land bank, with a capital of
$3.50. .OO0 may lend a total of $15,-
O00. 900 on first moragtges.
Both mortgages and bonds are ex-
empted from all taxation and the CAPT |
tai stock of the federal land banks is
likewise exempted. The bonds of
these will be issued in denominations
Of 500, $50. 500, $500 and 1000 and
federal reserve banks and member
banks of that system may buy and
sell them.
The federal farm loan board. which
has supervision over the whole system,
is composed Of the secretary of the
treasury, as chairman. and four mem
bers appointed by the president.
Each federal land bank will be in
the hands of Ave directors. appointed
by the federal farm loan board, until