The Bottineau courant. (Bottineau, Bottineau County, N.D.) 1895-1929, 1916-11-30
One PHASE OF THE
FARM LOAN ACT.

The question has been fire.
quently asked, How can a
renter who has not saved 80 per
cent of the purchase price of
land make use of the Federal
Farm Loan act to get land of
his own?"
This question has been ans
wered by w. 2. Goebel of Kan
sas City, Kansas, president of
the American Bankers Associ-
alton, before the hearing of the
Federal Farm Loan Board at
Topeka, Kansas. Mr.. Goebel's
verbatim statement cove ring
this matter follows:
Il heard several gentlemen
say this morning, but how are
you going to advance the inter
ests of the tenant farmer that
has not got the so per cent saw
ed up to buy his land?' Why,
if the tenant is the right kind
of man there will be. no trouble
whatever. And here the per-
sonal equation comes in. The
Government must require alb
solutely the same maximum re-
~quirements from everybody
who does business with these
banks, and the local banker
will take into consideration the
personal equation of a man
wanting to buy land; and, as a
banker | would not hesitate to
say that l would loan freely on
second mortgages. / would
not in a commercial bank; but
in a trust company or invest
ment bank [ would lend freely
on second mortgages 80 long as
| could see that the interest
and the amortized payment on
the first mortgage and the in
terest on the second mortgage
and taxes aud upkeep of the
land would still be less than
the rental value of the land.
We will say a young man
who has worked for a farmer
for a number of years, or a man
of middle age whom [ have
known for years has rented a
place, comes to me and says, L
have $1,000, and I have two
spans of horses and some COWS
and some sows-enough rea.
sonably to stock 80 acres of
land. l have got to pay $50 an
acre for the land. l can get
a loan thru the National Farm
Loan association of Saunton
township for So, 700. Will you
loan NE the other ST, OOO?'
Now it is a very easy pro.
position to figure it out. l will
figure that on the first mort
gage of So, 900 he will pay $120
interest at 6 per cent. [ am
figuring now on the maximum.
He will pay 500 on the amorti-
cation fund. Now, l loan him
the $1,000 at 7 per cent, if you
please. He will pay me $40,
and l will figure that his taxes
cost him $50, which makes a
total of $3.50.
Now, that 80 acres of land
he rented it would cost him
anywhere from 1926 to $500 a
year for rental. 1t goes with,
out saying that he will take
more interest in that piece of
land as an owner than as a
renter. He will take better care
of it and improve it. It will be
improved rather than deterior-
ated. It does not take a great
stretch of imagination to see
that this man with the 81. 600 l
loaned him can pay on an aver
age of 800 a year on the princi-
pal. In other words he can re-
turn the $1,000 am loaning
him in ten years. Then, he
will simply have a proposition
that with any intelligent work
at all he will absolutely make a
living and the small sum he
pays yearly to retire his loan
finally will hardly he taken in
to consideration. In fact, it is
my opinion and what l am say
ing to you, gentlemen, is sim
ply based on years and years of
observation of the farmer and
continuous financial and other
business | have had with him,
with any intelligent work he
will have something that will
make him an absolutely sure
living for a good sized family.
The result of these long
time loans will also be that
more Of the income from the
farm can be placed into equip.
ment for the farm; equipment