The Palatka news and advertiser., 1916-08-04

rodoraI farm loan act, popu-:
The 1,IoJ [1" the "Rural credits law"
srIy .;~ned sr1,s by the President and be-
as sly law law on July II, 1916.
a4e ne, urinary Irn purpose of this act
The e,Ip"mote agricultural prosperity
to o,dhIing R farmers to borrow money
enaOllIlS aaU,l mortgage security at a rea-
la[,'lt an rate of interest and for rel
pnaGIle pyI,' long d periods of time. TO at
t'eH, tH,iS S obiect, two farm-mortgage
pia ll.ms oni' are re- provided: (D A system
FtelliiT tiog ;" through regional land
PeIa'",H E, and C2l system operating
anks, ,b " ioint-stock land banks.
Ieus4 Na sst+Tact money to the farm-loan
j u I tbe act provides a method
ea a.,bv wv those who have money to
ni'Isi Ne csn find safe investment in the
nu '"t' OF debentures or bonds, Of
'rli Iln " and large denominations, is
lal' NJ Nv the banks and based on the
lsa as,rity ty Of mortgages on farm lands.
'T Tbase two systems are to be under
Issn Insoneral supervision of a Federal
W. y Loan Board in the Treasury
'asnrtment. 'lm composed of the Secre-
I1p sp"l of the Treasury, as chairman ex-
H. and four members appointed
'IiTa +be President. This board has
y.bnritv ,n to appoint appraisers, ex-
rirers, .-,r and registrars, who will be
| lJic officials.
Federal Land-Bank System.
rraor the Federal land-bank sys-
I,n oDt the act provides for Federal
|ni hanks which make loans, for the
,St p months, exclusively through
,,aI national farm-loan associations
,~nosed of borrowers. These asso-
t%tors f shall be shareholders in the
,nEs and in that way the members
rfn are the borrowers will share in
Il nrofts of the bank. The money
" tfbe loans is to come partly from
y captal of the banks and partly
|ron the sale by the banks of bonds
[srred by first mortgages on farm
IMds The act defines strictly the
frrposes for and the conditions under
tith loans are to be made, and
(smres that the rate of interest
karged on farm loans shall not e1-
he'd 6 per cent per annum.
| The United States shall be divided
! ro z farm-loan districts, and Fed
bsl land bank with a subscribed cap
HI stock Of not less than $750,000,
hh share s., shall be established in
6ch district. Each Federal land
! |ank may establish branches in its
EHrict Within 80 days after the
Espita! stock is offered for sale it
kay be purchased at par by anyone.
thereafter, the stock remaining un-
kld shall be bought by the Secretary
h the Treasury for the United
EateS. 1t is provided, however, that
|he Government shall not receive any
ErdendS on its stock. Ultimately,
\ is intended that all the stock in
fh banks shall be owned by the as
|M2tions of borrowers, and provis-
Fm therefore is made in the law for
FranSterring the original stock at par
b these associations.
Farm-LOan Associations.
The act provides for the creation
E local national farm loan associa-
EOlS through which it is contemplate
b that the Federal land banks shall
hake their loans. In the event that
local loan association is not form
4 in any locality within a year, the
Federal Farm Loan Board may. au-
Eiorze Federal land bank to make
pans on farm land through approved
EgentS. Ten or more persons who
pm and cultivate farm land qualified
\ security for a mortgage loan un-
Er the act, or who are about to own
Eiq cultivate such land, may form
Eca an association, provided the ag-
Fegate of the loans desired by the
Fen0ership is not less than $4,000.
N:h member must take stock in his
Esoclatlon to an amount equivalent
\ per cent Of the amount he wishes
borrow. This stock the associat-
~ noId3 in trust as security for the
rFnoers individual loan. The as
lNatlon, in turn, when applying for
Itoney from the bank, must subscribe
". u stock in the bank to an amount
to 5 per cent of the sum it
I .alS to obtain for its members. This
,a,, ,@A Is held in trust by the bank as
sSaAty for the loans it makes
moagh the association. If a pros
pS.,e NHtEe borrower has no money with
!, s4cA to pay for his association stock,
~, ) may borrow the price of that
ss ~sA as part of the loan on his
,1.i Under this plan, then, every bor-
,,,I ""TF must be a stockholder in his
'''' association, and every associa-