Durant weekly news. (Durant, Choctaw Nation, Indian Territory [Okla.]) 190?-1944, 1916-08-04

ICOndttiOns Under which Loans May
BE Obtained
The act speciificall defines the
land for agricultural use
(b) To provide for the purchase Of
equipment, fertilizers, and live stock
necessary for the proper and reas-
enable operation OF the mortgage
farm; the term equipment" to be
defined by he Federal Farm Land
Board
(c) To provide buildings and for
the Improvement of farm lands the
term improvement" to be defined
by the Federal Land Board.
Cd To liquidate Indebtedness of
the owner of the land mortgaged. ex
listing at the time of the organiza-
ton of the first national farm loa
association established i'm or for the
county in which the land mortgagej
is situated, or Indebtedness subse-
quently incurred for one Of the pur-
poses mentioned in this section.
Loans may be made only on first
mortgages on farm land.
Only those who own and cultivate
farm land or about to own and cult
vate such land are entitled to bor-
row.
No one can borrow save for the
purposes stated in this act. and those
who after borrowing do not use the
money for the purposes specified in
the mortgage are liable to have their
loans reduced or recalled. The sec
retary-treasurer of each association is
Required to report any diversion of
borrowed money from the purposes
stated in the mortgages.
No individual can borrow more
than $4,000 nor less than 500.
No loan may be made for mo @
than so per cent of the value of Che
land mortgaged and 90 per cent of
the value of the permanent insured
Improvements upon It.
The loan must run fro not less than
nor more than 40 years.
Every mortgage must provide for
the repayment of the loan under an
amortization plan by means of a
fixed number of annual or semi-an-
nual installments sufficient to NEE.
all interest and pay off the debt by
the end of the term Of the loan. The
installments required will be thos3
published in amortization tables to
be prepared by the Farm Loan Boaru.
The bank is given power to pro-
tect itself in case of default by re-
calling the loan in whole or in part
ln,. tol "a oh
The Interest Rate Paid by the
Borrower
No Federal land bank is permitted
to charge more than per cent per
annum on it's farm mortgage loans,
and in on case shall the interest
charged on farm mortgages exceed
by more than | per cent the rate
paid on the last issue of bonds.
For example, if the bank pays only
per cent on an issue of bonds, it
cannot charge more than per cent
for the next farm loans IL makes.
Out OF fhis margin of not to eX
ceed ! per cent together with such
amounts as it can earn on its paid II
cash capital, the bank mus. set aside
certain reserves and meet all its eX
penses. Any balance or net profits
can be distributed as dividends to the
loan associations or other 5tockhold-
ers. The loan associations, from
their bank dividends, after setting
aside tn" required reserves and meet
ing expenses, can declare associa-
> tion dividends to their memD Ders. I'm
this way the profits If any. will De
p distributed among the borrowers and
will, to that extent, rctuce the
amount Of interest actually paid by
them.
20 Restriction on Fees and Commissions
The Federal land banks are ex-
pressly prohibited from charging, in
connection with making a loan, any
fees or commissions which are not
authorized by the Farm Loan Board
The authorized fees need not be paid
in advance, but may be made part OF
the loan.
Amortization Plan of Rcpaying Loan
1t has been said that all loans are
S TO be repaid on the amortization
= DlOIs MS pan NhAAo lNl a Ahilb'
e. of fixed annual or semi-annual pay
ments, which include not only all in
terest and charges due the bank bu
: the principal as we'll. These payment
2 are so calculated as to eXtinguish tn,
Il debt in given number of years. Ar
ter five years the borrower has thu
s right on any interest date to make
additional payments on the principa
in sums Of $25 or any multiple there
of, thus discharging the debt NOR,
lquickly.
The table given below illustrate
how a loan OF $1,000, bearing inte
e est at per cent, would be retired II
20 years by an annual payment o
nITV NEEnQ NrW