The Morgan City daily review. (Morgan City, La.) 1916-1920, 1916-09-09
FARM LOAN ACT

Orleans will mean the passing Of
short time, heavy interest bearing
papers and the farmers nightmare
proceedings. Thoroughly
the benefits that Will
follow the selection Of New Orleans
farmers. bankers and business men
over the state Of Louisiana and other
territory contiguous to New Orleans
have Joined forces in an effort to
impress upon members of the FED
.ral Farm Loan Board the wisdom
of naming the Southern metropolis
as a farm bank site.
With an executive committee, the
membership Of which IS composed OF
leading Louisianans. consistent
campaign is being waged to secure
recognition for New Orleans. The
battle is participated in by Honorable
Harry D. Wilson, Commissioners OF
Agriculture, and Justin F. Denechaud
Secretary Of the immigration d.
vision of that department. The pre-
liminary work comprises a campaign
of education so that the farmers
NAV become familiar with the rural
credits system that will aid 50 ma
IterialIy in the development Of Louis
lana and the entire Southland.
Mr.. Denechaud was in Morgan
City Friday to arrange meeting to
be held Tuesday to be addressed by
W. }. Leppert, representing the Ne"
Orleans committee on management.
Mr.. Denechaud is travelling in ad-
vance of Mr.. Lcppert and from here
he will visit other sections Of the
state in interest Of the movement.
While in Morgan City. Mr.. Dene-
chaud conferred with parish Off
Gals and some Of the prominent busl-
ness men to stimulate interest in the
meeting to be addressed by Mr.. Lep-
pert.
In connection with this campaign
it might be well to give some of the
more essential features of the act
creating the Federal Farm Loan
Board which is to administer the
Federal Farm Loan System in the
same way the Federal Reserve Board
administered the Federal Reserve
| banking system.
The Act provides that ten or more
farmers in any community may IN
corporate as National Farm Loan
Association. The loans they apply
! for must aggregate not less than
500. 100000 Each individual loan
must not be less than $4,000 and
not more than $4,000. The loan
NAV not exceed one-half Of the ap-
nraised value of the borrowers land
Mus one-ffth Of the insured value
Of his buildings. Each member OF the
Association agree to purchase one
share Of location association >tocf
at a par value of IS for each sl0O
borrowed. His liability for the debts
Of the association is limited to dou-
ble the amount Of his stock. or slC
Iper 500 borrowed There is no
,,her Joint and several !iath'ty
t.nde: he present borrowing IA
i b. for
the United States the average cost
Iof $1,000 is $3.50 per year, taking
the country as whole Of 81 per
cent interest. At this rate, borrow
| er in thirty years will pay S2,sO5 IN
lterest on a $1,000 loan. The COM
mound interest on this interest which
the lender gets is $3,5O5. Thus a one
Thousand dollar loan for 33 years
under present facilities costs the
farmer $2,SO5 in interest paid out
and costs him 1885 in compound in
terest lost. or total Of $1,000. At
the end Of 80 years the borrower still
owed the principal of $1,000 making
| his total cost $7.4O0.
Under the system provided by the
Federal Farm Loan Act, the farm
ers' total cost on q $1,000 loan tor
33 years, figuring interest at the
ma xmum Of 6 per cent, allowed by
the act will be $2,310, which covers
both the principal and interest and
thereby saves 5000. Thus the farm
err will readily see the advantages
he will soon enjoy after the location
and operation Of one of the Farm
Loan Banks in Louisiana, New Or
leans the designated point for the
bank
Mr.. Leppert will be in Morgan
City Tuesday night, September IL,
and will address the citizens at the
City Hall.