The Hickman courier. [volume] (Hickman, Ky.) 1859-current, 1916-07-27
RURAL CREDIT BILL
OFFERS Low INTEREST.

The rural credit bill as finally
framed by both Houses OF Con
gress and approved by the Presi-
dent provides for twelve Federal
Land Banks.
These are the central banks
that are to be the support of the
local farm loan banks, t. be
known as the JOINT Stock Land
Bank.
The central body controlling
these twelve Federal Land Banks
IS to consist of five members, AT
the head OF which IS the Secre-
tary OF the Treasury, the Press
dent TO appoint four additional
members.
Each Federal Land Bank must
have a capital OF $4,000. II the
capital should not be subscribed
by the public, it VIII be subscrib-
ed by the federal government.
subscriptions to the stock, BY
borrower, need not be paid in
cash at the time OF making the
subscription, but may, at the op-
ton III the borrower, be made a
part OF the face of his mortgage
loan.
That means If farmer sub
seribes for $1,000 of the stock and
wants to borrow $1,000. he may
make a mort gage for $1,000. pro
Nlded his land Is worth $1,000.
This loan VIII be paid IN small
instalLments and when paid his
land WIZ be free and he Will have
$1,000 of the stock of the bank.
Certificates of deposits may be
issued by the bank, with interest
not TO exceed 4 per cent.
When a farmer applies for a
loan, il must not exceed one-half
of the value of his land and 20
per cent of the value Of his inn
provements insured.
That means with a farm worth
$1,000 he may borrow $1,000 and if
his barn and other buildings, III
snred, are worth 800 IN addi-
ton, he can borrow $500 on these
improvements.
The country will be divided in
10 twelve districts, as IN the Fe
eraI Reserve bank system, and
one of these twelve banks viii
serve each district
IL each district provision Is
made for the organization OF
what Is known as the Joint Stock
Land Bank. These banks are to
carry on the business of lending
on farm mortga ges and issuing
farm land bonds. These bonds
viii be issued ON mortgag es Civ
en- by the farmer To the JOINT
stock land banks. These mort
gage bonds will be held by the To-
ca bank or they may be sold TO
the Federal Farm Loan Bank or
to other purchasers.
These local banks, known as
the Joint Stock Land Bank, must
have a capital OF $250,0OO They
may begin business when half the
stock is subscribed, and when
$125, 900 is paid in; but these
Joint Stock Land Banks can Is
sue no bonds until the capital Is
fully paid.
The interest to be charged for
the bonds issued by these banks
IS fixed at 5 per cent.
Farmers should not jump to
the conclusion that because Con
gress has passed this bill that at
once this credit IS available. This
bill provides for organizing these
banks. Subscriptions must be
made and the organization per
fected before any business can
be done. 1t is unwiSe To create
the impression among the farm
ers that they win all now be able
to borrow all the money they
want, or think they want, Tor
current expenses.
1t is doubtful if any loan can
be made, under this system, dur
ling the next twelve months.
The system is to DE IN the long
run a benefit to the farm regions
THE principle underlying the
tenn Is long term mort Cages, TO
he paid In small installments. 1t
/ Is called "ar1nortization," but 1t
only means partial payments at
FREQUENT intervals IN small sums
/ AS these payments are made,
the principal IS reduced and the
interest charge grows less. Ii
the original interest charge is
small, the farmer can, IN the
course of ten or twenty years,
nav his debt with what he saves