The Blackfoot optimist. [volume] (Blackfoot, Idaho) 1907-1918, 1916-08-10


ested in knowing the provisions and
working plan of the new federal Farm
Loan act, popularity known as the " Ru-
raj Credit Law and so the Gem State
Rural is giving. herewith, an outline OF
the same, together with some of the de-
tails of the act. 1t was signed by the
President and became law July IL,
1916.
The act provides for the creation of
twelve Federal Land Banks and per-
mits the establishment of any number
of Joint stock land banks for the pur-
pose of making loans ut a reasonable
rate of interest, for long periods of
time, on farm lands.
A Federal Farm Loan Board has
complete control over these banks.
Twelve Federal Land Banks are pro-
vided, one in each of II districts into
which the country will be divided.
These banks are empowered to lend Oh
first mortgages on farm lands i'll sums
of 800 to $4,000 for approved pur-
poses. 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.
National Farm Loan Associations.
Local organizations, composed exciu-
sivelv of borrowers, are authorized
These associations must be stockholders
in the land banks in proportion to the
amount their members wish to borrow.
Eventually all stock in the federal land
banks will be owned exclusively by
these associations.
A reasonable interest rate is estab
ished. The act prohibits the federal
land banks from charging more than
6 per cent on any mortgage, or reQulr-
ing fees not approved by the Farm Loan
Board
The borrowers will share in the net
profits of the bank because they are
stockholders. 1t is contemplated that III
timatelv the borrowers will be the only
stockholders.
Long term loans are provided by au-
thorizing mortgages for periods of from
) up to 40 years.
Small annual or semi-annual pay:
ments on the principal are made a re-
CURED feature of all mortgages.
B-Jont Stock Land Banks
Joint-stock land banks are authorized
They are corporations for carrying on
the business of lending on farm mort
gage security and issuing farm loar
bonds. They are to be under the super
vision of the Farm Land Board, hui
the government will not invest in. them
Subject to geographical limitations an.
subject to the 80 per cent and 20 PEE
cent limitation, these banks can len'
to an individual any amount they wish
and for any purpose. They can no
charge an interest rate exceeding pc
cent and such rate must not exceed b,
more than | per cent the interest the
have paid on their last issue of bonds
is Their mortgages, however, must provni
e for amortization payments. These bank
II are prohibited from charging, under an
W pretext, fees or commissions other tina
:. those authorized by the act.
s Conditions Under Which Loans May B
Obtained
ar The act specifically defines the pun
poses for which loans may be obtained
These are:
k, (a) To provide for the purchase G
or land for agricultural uses.
Of 90 To provide for the purchase {
ne equipment, fertilizers and live stoc
Tn necessary for the proper and reasonab
" operation of the mortgaged farm; II
ne term equipment y to be uefined by II
p Federal Farm Loan Board.
is (c) To provide buildings and for tt
Us Improvement of farm lands; the ter
Improvement to be defined by tt
Federal Farm Loan Board.
cd To liQuidate Indebtedness Of Il
II owner of the land mOrtgaged. eXistil
at the time of the organization of ii
u.s. first national farm loan association e
OK tablished in or for the county i'll Whit
ke the land mrotgaged is situated, or i
.,,h,ounonf1x- in.nrrau
one of the purposes mentioned in tn
ne section.
as Loans may be made only on fir
,ie mortgages on farm lands.
Only those who own and cultiva
o. farm land or are about to own and cl
ng tivate farm land are entitled to borro
IN No one can borrow save for the pl
tut poses stated in the act and those vi
vi after borrowing do not use the mon
for the purposes specified in the MOI
gage are liable to have their loans
ell duced or recalled. The secretarv-tres
sh- urer of each association is required
an report any diversion of borrowed mon
mis- from the purposes stated in the mo
90 cages.
no No individual can borrow more tn
$40 900 nor less than ZOO.
an No loan may be made of more tn
80 per cent of the value of the la
ON mortgaged and 90 per cent of the val
we of the permanent insured impro'
Ign ments upon it.
The loan must run for not less til
sh- { nor more than 40 years.
Every mortgage must provide for
my repayment of the loan under an amo
MS tization plan by means of fixed nu
|. Der of annual or semi annual inst;
ments sufficient to meet all interest a
Az lay off the debt by the end of the tie
OF the loan. The installments requiI
OF will be tables to be prepared by
and Farm Loan Board.
zen, The bank is given power to prot
ing itself in ease of default by recalling
'rn- loan in whole or in part or taking OF
Ose necessary action.
CHIT, ell, ,., hon, - ,or,n;+t.l