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

: The rural credit bill as finall,
) framed by both Houses of Con
gress and approved by the Presi
) dent provides for twelve Fedora
Land Banks.
These are the central banks
that are to be the support of the
, local farm loan banks, to 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 Presi-
dent TO appoint four additional
members.
Each Federal Land Bank must
have a capital OF $4,000. If 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 OF the borrower, be made a
part OF the face OF his mortgage
loan.
That means if a farmer sub
seribeS for $1,000 of the stock and
wants to borrow $1,000, he may
make a mortgage for $1,000, pro
vlded his land Is worth $1,000
This loan viii be paid in small
nstallments and when paid his
land VIII be free and he viii 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 farmer applies for a
loan, II must not exceed one-half
Of the value Of his land and 20
per cent of the value of his i'm
lpr0vements insured.
That means with a farm worth
$1,000 he may borrow 5000 and if
his barn and other buildings, IN
sured, are worth -, 800 in add
ton, he can borrow $500 ON these
improvements.
The country viii be divided IN
to twelve districts, as in the Fe
eral Reserve bank system, and
one of these twelve banks viii
serve each district
liz 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
lon farm mortga ges and issuing
farm land bonds. These bonds
viii be issued on mortgages Civ
en- by the farmer 10 the JOINT
stock land banks These mort
gage bonds viii 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 capital of $4,000. 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 viii all now be able
to borrow all the money they
want, or think they want, Tor
current exp enses.
1t is doubtful If any loan can
be made, under this system, dur
ing the next twelve months.
The system is to be in the long
run a benefit to the farm regions.
The principle underlying the
tenn is long term mortgages, to
be paid In small installments. 1t
Is called "ar1nortization," but it
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,
LIZ nth ,uhaf ha s,ar-xaS