Gunnison news-champion., 1916-05-12
lnTlIe EPlHs nE
finn LON blls
y Edvard Ksesiss, tCoasr.ssnsa iron
ths Third colorsdo Distsics.,

has been insrodsced in the House By
Congressman Moe Of Indisra
With one or two amendments. the
bill should render il possible for
farmers in all sections Of the country
70 borrow money at mot 70 exceed
s'x per cent per annam. In actual
operation ! believe the rate would be
reduced to Eve per cent.
The system 10 . very simple one:
Up at the top 10 the Federal Farm
Loan Board. consis6ng Of three men,
appointed by the President and draw, !,
ing $4,000 year. II is their busi-
ness to construct, start and super.
wise the gigantic system which will
penetrate to every community in the
nation. They are to show the farm
ers how, through cooperation, they
may keep themselves In addition
they must practice such rigid SUPER
vision as will assure investors Of the
safety Of the entire structure.
ORGANIZING THE SYSTEM
The 6rst thing the Federal Farm
Loan Board will do, If the pending
bill becomes law, is TO divide the
country into twelve districts and es-
tablish in each district central Fed
eral Land Bank with a capital of at
least S750.0O0. Then it will pro-
ceed, through its agents, with the
organization OF National Farm Loan
Associations These are to be the
local units Of the big machine.
Ten or moro farmers IN any COM
munity may organize an association
and apply to the Federal Loan Board
for charter. No one can bea mem.
ber OF the association unless he is a
farmer aud desires TO borrow from
the Federal Land Bank. When he
applies for . em bership the farm
er states the size Of the loan he de.
s'res. He cannot borrow less than
800 or more than $4,000. and he
can only offer one form Of security
q first mortgage on his farm.
SCRUTINIZIN0 THE LOAN
When a member petitions his as.
sociation for loan. the application
is referred 70 . Loan Committee"
consisting of three members. As
the association is local organiza.
tion the Loan COMMITTEES" will be
made up Of three farmers who live in
the vicinity Of the land which it is
proposed 70 mortgage and who are
poe0nnably familiar with values in
d heighborhood.
II tho LOAN Committee makes .
favorable finding, and the same 10
indorsed by the board OF directors Of
directors Of the association, the ap.
plicstion will be forwarded to the
Federal Land Bank Of that district.
The bank will Immediately send an
appraiser to view the land and
check up" on the finding of the loan
committee.
HEPAYlNG THE LOAN
II everything is found to be O. X,
the loan will be made. It will run
for from 1--WE 70 thirty.six years and
will be payable ON the amortization
plan---that is the interest and part
Of tho prlncipal will be payable each
year.
Loans will only be made ~ to
purchase land; ~ to buy equipment
or livestock; (3) to provide buildings,
ETC.; 70 pay off a mortgage.
In order that the Federal Land
Banks may get the money to make
these loans, the bill authorizes the
banks TO issue bonds to the face val
ue Of the mortgages on hand. These
bonds are TO be registered by the
Federal Farm Loan Board The
bank Of issue 10 primarily responsi-
bic for their redemption, but every
land bank in the nation is liable
should the first bank fail to make
good. In addition, the bonds are
not subject to local, state or federal
taxation.
B0NDS WILL BE GUILT EDGED
All in Ill, the securities should
prove guiltedged investments and
should Be salable at very low rate
of interest.
The banks will + permitted Il
charge the borrowe. ,ne per cent
more than they pay , their bonds.
Therefore if the be-. . bonds sell q
four per cent, the farmer must get
his money at Eve.
This i . brief. and very imperfect
summary Of the strong points Of the
bill.
Il has ono fundamental weakness,
1t authorizes the formation Of Joint
stock Land Banks with practically
all the powers and privileges Of the
Federal Land Banks. They are q
BE- pEivatsly owned, and Of course op'