The Richfield recorder. (Richfield, Idaho) 1909-1931, 1916-07-28
RURAL CREDIT BILL
SIGNED BY PRESIDENT
Will Mean Much to FarmeaS All Over
the United States

Under this plan, then, every bor-
rover must be stockholder in his
local association, and every associa-
tion a stakeholder in its district bank.
Each stockholder in an association is
liable for the acts of that association
up to twice the amount of his stock.
How Loans Are Obtained.
A member of national farm loan
association, before obtaining loan,
must first fill out an application
blank supplied to the loan association
by the federal farm loan board. This
application blank and other necessary
papers will then be referred to the
loan committee of the association
which must appraise the property of
fered as security. Such application
as is approved by the loan committee
is then forwarded to the federal land
bank and must be Investigated and
reported on by salaried appraiser of
the bank before the loan is granted.
This appraiser is required to investi-
gate the solvency and character of
the prospective borrower as we'll as
the value of his land. When loan is
granted the amount is forwarded to
the borrower through the loan asso-
citation.
The act specifically defines the pur-'
poses for which loans may be OBJ
tained. These are:
"(a) To provide for the purchase
of land for agricultural uses.
"(b) To provide for the purchase of
equipment, fertilizers and livestock
necessary for the proper and reason
able operation of the mortgaged farm
the term equipment to be defined by
the federal farm loan board.
"(c) To provide buildings and sor
the improvement of farm lands; the
term Improvement to be defined by
the federal farm loan board.
"(d) To liquidate Indebtedness of
the owner of the land mortgaged, ex-
isting at the time of the organization
of the first national farm loan associ-
alton established in or for the county
in which the land mortgaged is stu
ated, or indebtedness subsequently
incurred for one of the purposes mem
toned in this section"
Only First Mortgages.
Loans may be made only on first
mortgages on farm land
Only those who own and cultivate
farm land or are about to own and
cultivate such land are entitled to
borrow.
No one can borrow save for the
purposes stated in the act and those
who after borrowing do not use the
money for the purposes specified In
the mortgage are liable to have their
loans reduced or recalled. The secre-
tary treasurer of each association is
required to report any diversion of
borrowed money from the purposes
stated in the mortgages.
No individual can borrow more
than $4,000 or less than 500.
No loan may be made for more than
SO per cent of the value of the land
mortgaged and 20 per cent of the
value of the permanent insured i'm
provements upon it.
The loan must run for not less than
5 and not more than 40 years.
Every mortgage must provide foI
the repayment of the loan under an
amortization plan by means of fixed
number of annual or semi-annual In.
stallments sufficient to meet all In
terest and pay off the debt by the enc
of the term Of the loan. The install
ments required will be those publish
led in amortization tables to be pre-
pared by the farm loan board.
The bank is given power to protec'
itself in case of default by recalling
; the loan in whole or In part or taking
other necessary action.
Interest Rate.
No federal land bank is permitted
to charge more than 6 per cent pc
annum on its farm mortgage loans
and In no case shall the interes
charged on farm mortgages exceed b.
, more than l per cent the rate paid ol
;, the last issue of the bonds.
For example, If the bank pays onl
! Ia per cent on an issue of bonds,
cannot charge more than s per cen
for the next farm loans 1t makes.
Out OF this margin Of not to excee'
! 1 per cent, together with such sum
: as It can earn on its paid in cash cap
ital, the bank must set aside certai
, reserves and meet all It's expenses
: Any balance or net profits can be di'