The Hartford herald. [volume] (Hartford, Ky.) 1875-1926, 1916-10-04
FARM LOAN LAW
BOON TO FARMER
A Terse Explanation OF
Its Operation.
WORLD HAS FEW SUPERIOR
Says Federal Expert-how II
Acts For Development
OF the Soil.
GOVERNMENT NOT A LENDEI;

u (By Frank r. Wilson. Chief o.
! the Division of Information. Fed
eral Farm Loan Board, Washington
, y. c.
The farm loan act passed by tht
last session of Congress and signed
by President Wilson, gives the pco
pie of the United States a currency
system which, for fexiblity, has few
superiors in the world.
The Federal reserve act adopted
earlier in this Administration made
liquid at all times the credit of the
business man. Now the rural cred
its act supplies the other half of the
system, and it makes it possible for
the farmers of America to marshal
their credit to finance their business
enterprises on longtime and easy
payments.
r. Equally as important as is the
supplying of cheap money 70. the
farmer is the creation of new form
of investment in the shape of the
bonds of the Federal land banks
created under this rural credits sys-
ten. The sale of these bonds will
supply the money that will be loan
d to the farmers, and they are Sc
cured in so many ways as to make
them almost as attractive as Govern
ment bonds.
The adoption of the farm loan
act is great contribution to the
prosperity of Kentucky and Tennes-
see. Portions of these States come
: the high interest rate district. In
remote sections of these States the
farmers pay s per cent. for their
money. and this gate is often in
creased by the charge of a commits
sion for making the loan.
The passage of this bill means
that the farmers of this section will
get money for not over per cent,
and perhaps less, and it means that
squeezed when time of panic
comes along. The Government-con-
trolled Federal Land banks will be
doing business in times of stress as
we'll as in times of prosperity, and
the knowledge that they are always
prepared to meet the needs of the
farmer will do away with these Pc
RODS of stress.
In the better sections of Ken
lucky and Tennessee interest rates
are now reasonable. But in the sec
tons where money is most badly
needed for the development of farms
it demands the highest price.
One of the first effects of the es-
Enlistment of the rural credits plan |
will be to equalize these rates and
give the poorer sections some of the
advantages which the better sections
now enjoy.
Under this farm loan bill the
Government does not loan money to
the farmers. as many people think.
The Government provides the ma
chinery for assembling the capital
of the country so that it can be loan
ed to farmers at low rates and on
long terms. Under the bill the Gov
eminent will create twelve districts
in the United States and one FEEDER
al loan bank will be located in each
district. Each bank will have a cap
italization of $750,000, and the To-
coal community will be given the
first opportunity to buy the stock of
this bank. If it does not buy it, the
Government will buy it. If the local
community buys part of 1t, the Gov
eminent viii, buy the remainder. All
the dividends of that bank will 60
to the stock represented by private
investment. The Government win
not require a dividend on its stock.
After the stock of this bank is all
disposed OF. the bank will be ready
to lend money TO the farmers. Blu.
one farmer, acting alone, cannot
borrow money from this bank. Farm
ers must associate themselves in
groups of ten or more and form 10
cal loan associations. They then
petition the Federal Land bank of
their district. indicating the amount
of money desired and the land offer
ed for security The Federal Land
bank apprsises the land and If the
loans desired do not exceed so per
cent. Of tho value of the land. nor
30 per cent. of the value of the i'm
tho loans are made
the secretary of the local
loan association. who is bonded
officer,
When a Federal Land bank has
oaned $4,000 It uses this $4,000
worth OF FIRST farm mortgages for |