Weekly journal-miner., 1916-08-23
ROWMUCHMONEY FOR ARIZONA IS
 THE QUESTION
FARMERS OF THE STATE INTERESTED IN THE WORKINGS OF FEDER- AL LAND BANKS.
(From Tuesdays Daily.)

The question of the exact rate of interest that farmers will have to pay on loans made by the Federal land banks is not nearly so important as the question of how much money the regional bank serving Arizona will have to lend. The rate of interest is limited to 6 per cent; 1t may not eal- cced by more than per cent the rate paid on the last issue of bonds sold | by the bank.
 Six per cent money will be absorb cd by the farmers of Arizona as greedily as a thirsty soil sucks up water Only those who own and cul tivate farm lands, or who are about to own and cultivate such lands are en- titled to borrow, and they may bor- row only for specific purposes of buy ing land, equipment, fertilizers and livestock, providing buildings and i'm provemcnts and liquidating existing indebtedness. Loans may be made only on first mortgages on farm land. Now the capital of each of the F regional banks is to be S750O00, but by selling bonds to the amount of 20 times its paid-up capital each has an ultimate loaning power of Sl6,250,000 or SlSOOOO,OOO for the entire country
 Exempt From Taxation.
 The ability of the bank to meet de- mands for loans is therefore depend cnt upon the attractivencss of the bonds To make them attractive to investors, the bonds, together with the mortgages upon which they are based, are exempted from Federal, State, municipal and local taxation and are made legal investments for liduciary and trust funds. The capital stock of the Federal banks is also eX empt from taxation. Federal reserve banks-the kind that congress cstab- lishcd year or so ago are under the rcw banking act-and member banks of that system, arc empowered to buy and sell these bonds. They are to be issued in denominations of SEQ, $50, $i00, $500 and $l,0OO.
 From S1O0 to Sf0000.
 No individual caG borrow more than SlG JJ0, nor less than $l00. No ioan Iay be made for more than 50 Der cent of the value of the land mortgaged and 20 per cent of the per mancnt insured improvements upon it. The loan must run for not less than five and not more than +0 years. Repayment Is to be made under an amortization plan by means of fixed number of annual, or scmi-annual in ! stallments, sufficient to meet all in tcrcst and pay off the debt at the end | O. the term of the loan.
 The Federal farm loan board, un- der the treasury department, which | was recently organized by President | Wilson, is planning a trip to the Pa cifc coast and back for the purpose of securing data on which to base the districting of the country. It is prob able that the trip West will be made through the North and return by the South. Forty cities have filed appli cations to have bank located in them.
 With l2 districts in the country, this allows four States to a district, but it is probable that the grouping will be arranged according to the density of population and that con siderable number of States in the Southwest will be grouped together. Owing to the cheaper money which may be obtained in the East, the dc mandS of the West on the system may be such as to dictate tine location oi d goodly number of the banks in this region. As the bonds arc salablc in any market, this should tcEd to NtludllLC matter
 How to Get the Coin.
 Before the farmers in any section can borrow they must organize a fsrm loan association, which involves I subscribing per cent of the amount they want to borrow to the capital ( stock of the association, winch the association must turn over to its re- gional land bank as extra collateral ( The aggregate of the loans sought by the association must be not less than ( S20,000 Each stockholdcr or an as sociation is liable for the acts of that association up to twice the aa.ouat of his stock.
 Ten or more members are necessary to form a farm association. Ii a
 |. 41, q, |