Gilpin observer., 1916-08-03
WASHINGTON NEWS
BY Edward Heating

ueut WllsCn EaS appointed tie mem
bers of the Federal Farm Loan Board
which is to have charge of the new
system of rural credits authorized by
congress, and which 1t is hoped will
eventually reduce the interest rate
ON every farm mortgage in the Unit
ed States. This board consists of
five members. including the secre-
tary Of the treasury, who is chair
man., eX-officio.
The board will begin its work at
once, but several months must, neces
sarily. elapse before loans to farm
ers can actually be made.
The new system is very simple
one but as it is intended to cover
the entire nation much time will be
required to start the machinery.
Twelve Farm Loan Districts.
First OF all the Federal Farm
Loan Board must divide the country
Into twelve distric:s and establish
In each district Federal Land bank
with cash capital Of at least $780,
900. This money will be supplied by
tie national government.
Each Federal Land bank will have
charge Of the loans in its district
but these loans will be made through
Farm Loan associat ons.
The associations are the local
n Of ha o..
Organizing Associations.
Association may be organized in
any community. 1t must have at
least ten members and all the mem
bers must signify their desire to
borrow money for some one Of the
following purposes:
A. To provide for the purchase of
land for agricultural purposes.
b. To provide for the purchase of
equipment and live stock necessary
for the proper and reasonable opera
ton of the farm.
G. To provide buildings and for
the Improvement of farm lands.
d. To pay off mortgage on land
owned by the member.
Having secured at least ten quail
flied members the association applies
to the Federal Land bank for a
charter. This app p'ication must be
accompanied by copy of the asso-
Citations list of members, the articles
OF agreement, showing the boundaries
OF the district in which the associa-
ton expects to do business, and a
check equal to five per ce-t Of the
total amount that the members de-
sire to borrow on their land.
Borrowers are Stockholders.
Every borrower under the new sys-
tenn must become a stoockholder in
the Federal Land bank to the extent
Of five per cent of his loan and the
check mentioned above is intended
to take care of that item.
On receipt of the application the
officials of the Federal Land bank
will cause an investigation to be
made concerning the standing of the
members of the proposed association
and II everything is found to be all
right will recommend to the Federal
Farm Loan board in Washington that
a charter be issued.
AS soon as it received its charter
the association will be prepared to
do business. A board of directors
and a secretary treasurer will be
chosen and the directors will select
loan committee of three
The members applications for
loans will be referred to this COM
mittee which will appraise the land
and improvements and report back
to the board of directors. If an ap-
plication is approved by the board it
will be forwarded TO the Federal
Land bank. The bank may or may
not order a reappraisement If the
will be paid to tie borrower at once.
Conditions Of Loan.
The bank may loan fifty per cent
of the value of the land and twenty
pe' Stut VI tIe value VI TIE uIplO I'VE
ments.
The lean can not be made for a
period of less than five years nor
more than forty years and the rate
Of interest must not exceed six per
cent.
Every mortgage must contain an
amortization provision which requires
the borrower when he is paying his
annual interest charge to pay a small
sum on the principal, thus gradually
wiping out the principal.
For example: Suppo7e a farmer
borrows $1,000 for SO years at per
cent Under the old system he would
pay $50 year interest for thirty-six
years. or $2,160 and he would still
owe $1,000