Alma record. (Alma, Mich.) 1878-1928, 1916-08-31
GIVES FARMERS
LONG TERM LOANS
Rural Credits Bill Allows
Farmers to Borrow Money
for Forty Years.
NO LOANS BUT TO FARMERS
Twelve Banks in Country Each
Will Have S750,000
Capital.

The rural credits bill, as explained
by members of the federal commits
sion, which met farmers and banker:
at Lansing last week, is to throw the
credit system of the country open tc
the farmer on a liberal and attractive
basis.
The board is making a tour of the
United States for the purpose of OBJ
taining information on which to base
its first important work, which is to
divide the country into II bank dis
tricts with a federal land bank in
each.
Under the provisions of the act il
is possible for the farmer if he so
desires to borrow money for 40 years
with the privilege of repaying the
same in small installments. More than
this he will not have to pay more than
per cent on the loan. The plan per-
mits the farmer to pay off his mort
gage gradually and in amounts fixed
by himself.
No loans are to be made to any per-
son who is not at the time, or expects
shortly to become engaged in the cul-
tivation of the land mortgaged. Thus
the advantages of the farm loans act
are of a nature which will appeal to
the farmer, or those about to engage
in farming.
The act provides that when a fed
oral land bank has loaned $50.0 900 to
farmers it may issue a corresponding
amount Of farm loan bonds, and that
the total that may be issued by any
one bank on a minimum capital of
S75O,O00 is to be 20 times that capital.
This would give each bank S15,OOO,-
900 and the whole system 500 900. 900
TO loan on first mortgages. Farm loan
bond are to be made attractive by
payment of not more than per cent
interest and provision that they shall
be exempt from federal, state or mu-
nicipal taxation.
What the farm loan aims to accom-
plish is to permit the farmer, like the
merchant and manufacturer, to obtain
money at fair and reasonable rates of
interest; to enjoy the money over a
long period and repay it in small in
stallments; TO protect farmers from
loan sharks; to make it possible for
renters to become owners of farm
lands; to encourage farming on a
larger scale, and pave the way for
real cooperation among agricultur-
lists; to encourage farming i'm unde
veloped regions; to relieve the large
percentage of farmers of the country
from the worry and despair they now
are under as the rsult of the financial I
struggle existing at present; to bring
together the farmer who wants to |
borrow the money and the investor |
VINO has some savings TO loan and re- /
liable security, and to relieve the
farmer from money scarsity.
Each of the - farm loan banks to |
be established under the terms of the
act have a minimum subscribed capi-
lal of S350,000 before beginning bust
ness. The capital stock of each bank
Is to be divided in to shares of So each
and may be subscribed for and held by
any individual, firm or corporation.
~ the government of any state or the
United States. The capital stock.
surplus, mortgages and farm loan
'onds and all income derived is exempt
rom federal, state, municipal and
peal taxation.
The banks will not loan directly to
he farmer, but through the agency of
rational farm loan associations. which
nay be organized to any number in a
and bank district by 10 owners of
arm lands. Loans will be made only
m first mortgages on farm property.
nd the value of the land will be the
lrst consideration. Loans will be
rade only for the purchase of land or
is Improvement; for the purchase of
i've stock equipment or fertilizers:
c privide buildings, or to liquidate in
ebtedness existing when the first
ssociation was formed in the district
'here the land is located. This later
eature will enable farmers, now
with debt, to pay off obli-
ations which are saddling them. with
honey obtained through their own as
at a reasonable rate of in !
crest ia