The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1916-08-14

debtedness, existing when the first as
sociation is formed in the county
where land is located. No loan will
be made of more than $4,000 nor less
than 800. Interest win not be
charged greater than six per cent.
The loan itself will be reduced thru
an amortization plan providing for
reduction by annual or semi-annual
payments on the principal. No mort
gage shall run for more than forty
years nor less than FIVE, and there are
the necessary provisions in the law
for satisfaction of overdue interest
or amortization payments.
The money to be loaned will come
through the federal land banks,
passed to the hands of the National
Farm Loan association and TO the
farmer. The capital stock of the
land banks will not give them much
loaning power so Congress increased
that power greatly by authorizing the
banks to issue farm loan bonds and
sell them in the open market. The
act provides that when fednral land
bank has loaned $4,000 to farmers it
may issue a corresponding amount of
farm loan bonds, and that the total
that may be issued by any one bank
on minimum capital of $750,000, is
to be twenty time that capital. This
would give each bank s15,000,000 and
the whole system $180,0O0,00 to loan
on first mortgages.
Farm loan bonds are to be made at
tractive by payment of not more than
five per cent interest and provision
that they shall be exempt from fed
eral, state or municipal taxation.
They are made legal investments for
trust funds. They are not to be obli-
cations of the United States, but will
have behind them the first mortgages
on farm lands. These mortgages also
are exempt from taxation.
In case local conditions do not favor
organization of farm loan associa-
tions land banks may be authorized
by the farm loan board to make loans
to farmers through agents it ap-
proves, such as banks, trust or mort
gage companies, and the law permits
establishment of joint stock land
banks to lend directly to borrowers ON
first mortgages of farm lands. These
bands will be under supervision of the
farm loan board, but will not be as
sisted by federal loan bank funds as
will loan associations. The stock
banks, however, which are to be cap
italized at not less than $250, 200
each, also may issue farm loan bonds,
exempt from taxation and based on
first mortgage securities, to the ex-
tent of fifteen times their capital
stock. These banks are subpect to
the same provision of the law as loan
associations, in respect to interest
rates, amortization, etc.
In the beginning the federal land
banks will be governed by directors
appointed by the farm loan board, but
after subscriptions from loan associa-
tions to any federal land banks cap
ital stock, reach 100000, an elective
system will become effective, with
three directors chosen by the board
and six by the loan association. The
board will approve compensation
paid directors and officers of these
banks. The loan associations viii be
directed by unpaid officers except a
secretary and treasurer, or secretary
treasurer.
Banks and loan associations viii be
subject to the customary examina-
ton by persons appointed by the
farm loan board and the law provides
penalties for infrigmements of it's
provisions or counterfeiting of farm
loan bonds.
An unclassified ad. will pay you.