The Butler weekly times., 1916-08-03

Six directors known as local di-
rectors, shall be chosen by the ma
tional farm loan association.
Three directors, known as district
directors, are appointed by the
Federal farm-loan board. Thus
do the borrowers who own the
stock in the bank control the
same.
national Haat eHtat4f. f,atfr farm loan tssocia-
tion as provided in the law, must
be composed of not less than 10
men in any community or coun-
ty within Federal land-bank dis
trict who desire to secure loans.
These ten men elect not less than
5 directors from their membership
and also select a secretary-treas-
urer. Three members are consti-
tuted a loan committee to make
application to the Federal land
bank. The aggregate amount of
these loans cannot be less than
$4,000. Upon approval of the
application, following proper in
vestigation and appraisal by the
Federal land bank, the 10 or more
applicants for a farm loan asso-
citation are granted "a charter -au-
thorizing the association to re-
ceivc from said Federal land bank
sums of money to be loaned to it's
members.
When a borrower wishes to OBJ
tain money he becomes a member
of national farm loan associa-
tion and makes application to the
secretary-treasurer, who submits
this application to the local loan
committee. The application must
be accompanied by an agreement
to take 5 per cent Of the amount
of the loan in stock in the Federal
land bank Of the district. When
the loan is approved, as provided
by law, the applicant becomes a
member of the National Farm
Loan Association and obtains his
loan from the Federal land bank.
While the applicant who may
have property sufficient to entit-
le him to a $1,000 loan actually
gets, in cash in hand. but $3.50
(*5O being invested in stock of
the Federal ll,asfHta l,asfH bank he ell
titled to all the profits made ON
the stock Furthermore, when
the loan is paid off he is credited
with the $50 worth of stock, and
it is then cancelled.
In addition to the purchase of
$50 worth of stock, the applicant
for $1,000 signs an agreement
guaranteeing liability to the ex-
tent Of 10 per cent. or twice the
amount of the stock. When the
borrower loan has been liquidat-
ed his stock is cancelled and the
a greement is at an end.
The borrower regulates the per-
iod of time for the loan to run
from ) to 40 years. Suppose the
loan is for 81 900 to run 20 years
at 6 per cent. to be paid on the
plan. which is an an
nual payment consisting Of the |
and interest. By max
ing a total annual payment of
1919 for 20 years, or $1,743.46
Ill told. the interest would be
Kept up and the principal wiped
nut. As the calculation of prin-
.ipal and interest on 81 900 for 20 .
Years. at 6 per cent totals $4,000.
he saving on 81. 900 loan through
he amortization plan is $456.54.
If it is possible to make the in
crest as low as } per cent an
annual payment of $SO24 for 20
ears Ca total of $1,6O4.SO) will
are for the interest and pay off
he principal on Il $1,000 loan.
The act provides that the Fed
raj Hand ltatfd bank and
'onds issued by it. are exempt
rom Federal. state and municipal
axation. This exemption will
ave to the owners of the bank,
Who are the borrowers, consid-
rable amounts. Not only is the
oan plan as safe as is the gov
rnment of the United States, but
has been made in the
vent of disaster to the farmers
n any section of the country.
hould widespread dfouth or
ther disaster come, making it i'm
ossible for the borrowers tenn ,,
orarily to meet their obligations,
he government is authorized to
eposit in each land bank as much
s $50O,O0O to enable the borrow !
r to meet the interest on the
onds. Thus is the borrower as
lred that under such circum-