Arizona republican., 1916-11-19

have subscribed to shares of Water Users Association. and thereby pledged them directly or indirectly to the gov ernment, to secure to the government the re- payment of the cost of the con- struction of reclamation works, be deemed to be lands upon which first mortgage may be given under the pro- visions of the Farm Loan Act?
 End. May homestead entryman Of lands who has in every respect com piled with the public land laws who has made final proof of such compli- ance. and whose proof has been ap- proved by the General Land Office, but for which no patent has been is sued give a first mortgage" to secure a loan under the Federal Farm Loan Act?
 These questions brought out very interesting discussion. AS to the first question Congressman Hayden stated that it was the unquestioned intention of the framers of the rural credits or farm loan bill to frame the measure so that it might be utilized by farmers under reclamation projects and he read a-letter from MT. Morse of the house banking committee. addressed to MT. Hayden, advising him that in his opin- ion the bill was so framed as to take care of farmers under reclamation pro- jects.
 Mir. McAdoo stated that the board was not ready at present to pass on this question as it was a legal one which should be referred to legal coun- sel but that if on investigation it was found that anything in the reclamation act would prevent farmers under rec lamation acts from availing themselves of the provisions of the rural credits bill, congressional action would un- doubtedly be promptly obtained which would clear up any uncertainty and provide means for farmers under recla nation projects to obtain the benefits of the new law.
 As to the second question raised con- corning the borrowing money by home steaders whose final proof had beer made but patents not issued, MT. Me AdOo stated that the board was pre- pared to eonstrue the act to enable sucf entrymen to become borrowers under the act.
 In the discussion it was brought ou that loans would be approved for tn, following purposes.
 1. To pay off existing debts.
 ,. To buy more land.
 5. To make improvements or to buy live stock for use on the land.
 It was also brought out that only lant cultivated by the owner can be bor. rowed on and that land cultivated by tenants will not be available as a basi. for loan
 A borrower must first buy stock ir the local farm loan association eaua 2 to five per cent of his loan, and as stockholder in a national bank he vii be liable for twice the amount of his D stock. When his loan is paid his stock will be cancelled and the money orig. inally invested in it. will be returned to him.
 The fact was brought out that tn, rate to the farmers will be one De, cent in excess of the rate at which tn. farm loan bonds sell, this one per cen to cover the operating charges so tha Tn the early operation of the law tn. rate to the borrower will probably b, six per cent.
 The first testimony of the afternoo, was given by D. o. Payne of Cochise It was as follows:
 May a farmer, not a borrower as : slst his neighbour" he asked Commis sloner Quick replied that he could tne secretary treasurer of the loan as