The Hartford republican. (Hartford, Ky.) 18??-1926, 1916-08-11
farm LOAN ACT;
HOW 1T OPERATES
ASSOCIATIONS OF 20 OR MORE
MUST BE ORGANIZED TO BOR-
ROW $4,000.
TO ORGANIZE Il BANKS
Must Subscribe for stock in the Bank
To Extent of Five Per Cent OF
It's Loan.

The principal features of the Fed
eral Farm Land Act, or Rural Cred
its Law" now operative, provides for
two systems; one operating through
regional land banks and the other OPP
Grating through joint stock banks.
Both systems will be under the super
vision of the Federal Farm Loan
Board of the Treasury Department
composed of the Secretary of the
Treasury and four members appoint
ed by the President.
The Federal land bank system pro-
vides for Federal land banks which
shall make loans for the first twelve
months exclusively through local ma
tinnal farm loan associations COM
posed of borrowers. These associa-
tons must be shareh Jiders in The
banks and the borrowers must be
shareholders in the associations, and
will thus share in the profits. The
money for the loans is to come from
the capital of the banks and from
bonds issued by them based on farm
mortgages. The maximum rate Is
per cent.
There will be twelve farm loan
districts, each containing land bank
with a minimum capital stock of
s75O,000, whose stock shall be open
to public subscriptions for thirty
days. All stock not taken by the
public will be taken by the Federal
government, which shall receive no
dividends on it's stock. The land
banks will make loans through the
local loan associations, and where no
loan association is formed, the Fed
eral farm loan board will make loans
through approved agents.
An association may be formed by
ten or more persons who own and
cultivate land in one locality, pro-
vided the aggregate of the loans de-
sired is not less than 100000. Each
member OF an association must sub
scribe for stock to the extent of per
cent of his loan. The association
holds this stock as security for his
loan in addition to mortgage, and
when the association borrows from
the land bank it must subscribe for
stock in the bank to the extent OF 3
per cent OF it's loan. In this way the
stock bought by the Federal govern
ment when the twelve banks are or
ganized will be absorbed by the pub
lie. If borrower has no money to
subscribe for the stock, he can in
clude in his loan a sum sufficient to
pay for it. Provision for an APP
praisement of land and an investiga-
ton of the character of the borrow
er is made.
How Money May BE Used.
The act specifically defines the
purpose for which loans may be OBJ
tanned. These are:
"(a) To provide for the purchase
of land for agricultural uses.
"(b) To provide for the purchase
of equipment. fertilizers and live
stock necessary for the proper and
reasonable operation of the mortgag-
ed farm; the term equipment to be
defined by the Federal Farm Loan
Board.
"(c) To provide buildings and for
the Improvement of farm lands; the
term Improvement to be defined by
the Federal Farm Loan Board.
"(d) To liquidate Indebtedness of
the owner of the land mortgaged.
existing at the time of the organiza-
ton of the first national farm loan
association established in or for the
county in which the land mortgaged
is situated, or Indebtedness subse-
quently for one of the purposes men
toned in this section"
Lonas may be made only on first
mortgages on farm land.
Only those who own and cultivate
farm land or are about to own and
cultivate such land are entitled 10
borrow.
No individual can borrow more
than $4,000 or less than 500.
No loan may be made for more
than so per cent of the value of the
land mortgaged and 20 per cent OF
the value of the permanent insured
improvements upon 1t.
The loan must run for not less
than five and not more than forty
years.
Every mortgage must provide for
the repayment of the loan under an
amortization plan by means OF
fixed number Of annual or semi-an-
nual installments sufficient to meet
all interest and pay OFF the debt by
the end of the term OF the loan.
The installments required will be
those published la amortization ia
bles to be prepared by the Farm Loan