The gazette-times. [volume] (Heppner, Or.) 1912-1925, 1916-08-24
WHAT THE FARMER RISKS AMI
GAINS UNDER NEW ACT.

GAINS UNDER NEW ACT.
The Federal farm loan act is the
Magma Charta of American farm f.
nance" says the foreword in 1.-The
Federal Farm Loan SYSTEM" new
book by Herbert Myrick, author of
cooperative Finance" How to CO.
operate" etc, and published by the
Orange Judd Co.. New York.
Mr.. Myrick tells the reader much
about the recently enacted rural cred
its law; what it is and how it works.
Every farmer and student of finance
may gather considerable useful in.
formation by reading this book. II
contains. incidentally, the full text of
the new law.
Among the advantages to the farm
er, pointed out by Mr. Myrick, are
these:
He may borrow money upon long
term notes, extending from to 40
years.
He pays interest not to exceed 5
per cent.
He owns all the stock in the federal
land banks and has the sole voting
power in the local land associations.
He paws a little of the principal
each six months.
He has the privilege of paying off
the debt faster if desired.
He may invest savings in farm
loan bonds, paying from 4 to per
cent, and which are nontaxable.
The strictly limited incurred by
the individual farmer deserves to be
emphasized saws Mr.. Myrick.
Then he elucidates;
For instance, suppose you hold 10
shares amounting to $50 (upon
which you had borrowed $1,000.
If the association got into financial
difficulties, you might lose some part
or all of the $50. If all the land of
members were washed away. and all
the members failed to meet their pay
ments-which is unthinkable-you
might be called upon for as much as
$50 more. This is the same liability
that inheres to shares of national
banks.
1t should be almost impossible, un-
der the strict supervision which the
new system provides, for any national
farm loan association to get so deep
ly involved as to cost the sharehold-
ers any part of the m1ey they paid
in for shares.
In the event that your local as
sociation should become so involved
that you would have to lose the $50
you have paid in and be called upon
for $50 more, your own farm, even
though mortgaged to the association,
is not further involved in any way.
In the instance cited, you paid $50
for 10 shares because you wanted to
borrow $1,000 on longtime mort
gage on your farm worth $4,000 or
more. Now, if some calamity killed
all the other members and washed
away their land, but left you alive
and your property intact, even in that
almost unimaginable event, you
could be called to pay up only $50
more than the $50 you paid in ori-
ginally for your shares.
Now suppose that at the time this
quite impossible calamity occurred,
there was balance due from you of
$500 on your mortgage. The mort
gage, though indorsed by your as
sociation, is in fact held by the fede-
raj land bank, to which you must con-
tinue to pay the installments as they
come due under the contract.
AS long as you do that, your mort
gage can never be called or fore
closed. And no matter what happens
to other members or to their property
your farm, your home, all the real
estate covered by the mortgage, is
free from any liability whatever to
the other members or to the holders
of securities for which the various
are held az collaterai by
the federal land bank.
"This thoroughly American plan of
farm finance" says Mr.. My
rick, "is the best plan yet to be de-
vised for the farmer, but II you don't
to control it yourself, how
can you complain if capitalists or
ganize the joint stock land banks the