Yerington times. [volume] (Yerington, Nev.) 1907-1932, 1916-09-16
THE FEDERAL FARM LOAN ACT.-THE
FARM CREDIT FEATURE AND JOINT BANKS

in Reno, last Tuesday, was
for the purpose of holding public
hearing and investigation of the farm
credit situation in Nevada in rela-
ton to the operations of the new
Rural Credits Law, or Farm Loan act,
as it is officially to be called
This act was signed by the Presi-
dent on July 18th. The Federal Farm
Loan Board, created by the act and
having in charge its administration,
consists of the Secretary of the
Treasury and four appointed mem-
bers, namely: George w. Norris,
of Pennsylvania; Herbert Quick OF
| West Virginia; w. S. A. Smith, OF
Iowa, and Charles E. Lobdell, Of
| Kansas.
Twelve regional banks, to be known
as Federal Loan Banks, are to be
established by the Farm Loan Board.
| The present series of hearings
throughout the United States are to
enable the board to determine which
twelve cities shall be the cities OF
such regional banks and the states
| which shall comprise the district for
each. One regional bank. at least
| will be established on the Pacific
Coast and possibly two. Assuming
| that San Francisco may be choser
rs the site of one, then California
Nevada and probably Utah and Ari
iona would likely comprise its dis
,rict, with Oregon, Washington, Ida
10 and possibly Montana in another
district, and Portland or Seattle a:
| he site of the regional bank. 1t IS
lardly conceivable that Reno will b.
selected as the site of regional bank
he hearing on September IL beint
more likely in the nature of an investi
/ ration to determine the farm credit
ituation in Nevada and the proper
listricting of the state in respect t.
he regional banks.
che Federal Land Banks.
! Each of the twelve regional bank
| must have a subscribed capital stoc'
# not less than $750000., the pa
alue of each share being five dollars
The Farm Loan Board appoints tn
,fficers of the new bank and thu
apital stock is offered for sale at par
| 20 the public. The stock remaining
| ,nsold at the end of thirty days
bought by the Secretary of the Treas
| iry of the United States, but the
| government shall not receive any di
idends on stock so held, and pro
| vision is made for retransfer to as
ociations of borrowers by the gov
.rnment at par value, as hereinafte
| stated.
After regional bank has loane
| $4,000 on first morgagtes, it can OBJ
| ain permission from the Farm Loa,
| Board to issue Ike amount of farn
ponds based upon these mortgages
to sell the same in open market, an
% use the proceeds for further farm
| 'oans. This process may pc repeat
ID until bonds to 1.-THE amount o
wenty times the banks paid-up capi
al are outstanding. The regiona
banks may at any time increase thei-
capital stock above the required
| min mum of $750,000
The bonds (also the mortgages OIL
which they are based) are exemp
rom Federal, State, municipal and To-
cal taxation and are made legal in
| yestments for fduciary and trus'
funds. The capital stock of the banks
,lso, is exempt from taxation. Ths
| bonds are to be issued in demoina
tions of $40. $50, 500, $500, and 81 900
The Farm Credit Feature
Loans by the regional banks arc
made to local National Farm-Loar
| Associations organized within their
respective districtsl Ten or more
| persons who own and cultivate farm
| and or who are about to own an(
| cultivate the same, may form an as
sociation, provided, the aggregate
loans thy desire are not less thai
$4,000 Each member must take
stock in his association to an amount
equivalent to five per cent of thu
sum he wishes to borrow. This stool
is held in trust by the association a
security for the members individual
loan
The association, in turn, when ap
plying for a loan from the regiona
bank, must subscribe for stock in sucl
bank to an amount equivalent to five
per cent of the sum it desires to Dor
row, and this stock is held in trus
by the bank as security for the loan
~ m alas thro.,oh the accoc;at;o