The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1916-08-18
RURAL CREDIT WILL PUT
FARMERS ON BUSINESS BASIS
Bill Aims to Relieve individuals from
Putting up SO Much Work.
ing Capital

uUtAkkk up Sd MUCH WOEks
ing Capital
There have been many rural cred
its bills up before congress at diff
ferent times. The one which has
passed the present congress and got
signed by the president is therefor
a result of long planning of like leg
i%slation, the main purpose Of which
is to help the farmer open up his
land to high production and sc en-
rich the country on the whole. Farm
ing requires capital, just as any bust
ness, and the modern farmer begins
to see that it is not worth while for
each man to build up his business
gradually, as in the case Of an earlier
day when everything was ON trial and
development in it's infancy.
In these days many a big business
house starts big, on borrowed CAPT.
tai because it is known Beforehand
that it will pay if handled rightly
and with fair luck. Farmers are do
ing the same, but they have been
harshly treated in money matters.
Securing money on farm property,
in the west at least, has been such
a task that farmers were willing to
pay enormous rates of interest. The
legislators who have just put the
rural credits bill thru say in effect,
the American farmer has the best
security in the world, productive
land, why should they pay a userer's
price for money? In short, this bill
enables the farmer to obtain CAPT
tai for productive purposes at low
rates and for long terms on the Sc
curity of his farm"
Some of the very good reasons the
rural credits committee gives to
Justify the federal act are: farmers
need more money than ever before
on account of using more machinery,
more fertilizer, better seed, stock and
buildings. Bankers are slow to let
farmers have loans. Farmers have
been charged exhorbitant rates of in
terest. Ordinary banking systems
are not suited to the farmers long
time business loans. There is an
abundance of money seeking long
term investment at low rates.
The feature of the new bill is that
it will bring the long-term borrower
to the long-term investor and secure
both parties by a legislative system.
The primary considerations for
such a system were, in the eyes OF
the committee:
|. Absolute safety and attractive
income to the investor.
2. Low interest rates, lopg-term
mortgages and amortization pay
ments for the farmers.
2 Low cost of administration.
4. Simplicity of organization and
operation.
5, Adaptability to every part OF
the country.
6, Stimulation to the cooperative
spirit.
The General Plan
A federal farm land board will in
sure government control OF the sys-
fem. There will be IL federal land
hanks which are to be evenly dlstrl-
buted over the country, and these
main banks will lerd money thru
local associations. Farmers are TO
form these associations in their W
communities and call them national
farm loan associations. Each mem
her subscribes a certain amount for
stock and the association in turn
subscribes for stock in the tederal
land bank of it's territory. When a
members desires a loan his assocla-
ton looks him up, appraises his prop
and his personal credit, and gets
himthe money from the federal land
bank 1t acts somewhat as a farm
ers union. the local lodges having
mower to draw on the national order
for help for individual members. The
land banks will issue bonds on the
mortgages in their possession and
these bonds, secured as they are by
a powerful organization, will sell at
reasonably low rates. The bank Will
charge borrowers l per cent more
than is paid the bond buyers.
Restrictions on Mortgages
No bank may loan on land outside
it's district.
Every mortgage deposited as Sc
curity IS on the amortization plan,
so that part of the principal is PAID
up every six months.
The money must be borrowed for
productive purposes, for the pur-
chase of a farm for a home, or to
|iouidate existing Indebtedness.
No loan shall exceed SO per CEN
Of the appraised value of the mort
gagged land.
The borrower must engage in the
cultivation of the farm mortgaged.
The maximum Of loans to n bor-
rower is limited to $4,000.
The purpose of which the loan is
obtained must be stated.
The loan becomes due and payable
breach of any condition OF the