Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1916-07-18

OF all the helpful laws passed under the Wilson
Administration, few serviceable to the
country's productive interests and pecu-
EarIy important the South the Federal Farm
Loan act. Through this measure, which is soon
to become operative responsible farmers are en-
abled to borrow. easy terms and at fair rates
of interest, liberal of money for improving or
purchasing agricultural lands and also for meeting
their normal business needs. These accommoda-
tons. heretofore denied American farmers. espe-
cialIy in the Southern States, will be of priceless
value in rural development and will open the way
to new goals of prosperity.
The provisions OF this rural credits system
generous and simple and safe. The act provides,
first, for the appointment of Farm Loan board,
with headquarters at Washington, whose supervi-
sion over farm land banks will be broadly similar
to that of the Federal Reserve board over federal
reserve banks. The farm loan board will divide
the United States into twelve regions districts
in each of which will be established federal land
bank. The minimum capital of these banks will
be seven hundred and fifty thousand dollars,
sisting shares of five dollars each and open to
public subscription. If this amount is not made up
in due time the government will subscribe the re-
mainder.
When the twelve regional land banks es-
tabIshed. the way will be clear to organize ma
tionaI farm loan associations. Such associations
may be formed within prescribed territory by
ten or more farmers who wish to obtain loans;
and il is through such associations that individuals
may apply for loans TO the amount of fifty per cent
of the value OF the land offered security and
twenty per cent of the value of its insurable i'm
provements
The process of negotiating these loans is de-
scribed as follows:
The farmer will apply through the associa-
ton of which he is a member, for a loan of,
say, thousand dollars His application must
be accompanied by fifty dollars-fve per cent
OF the loan sOught-which entities him to that
amount of stock in a farm land bank. If the
appraisers pass favorably upon the value of
his farm. he gives a first mortgage to the local
association. which in turn forwards to the
federal land bank of the district the fifty dol
lars together with the first mortgage, properly
executed. The federal land bank, in turn, gives
the farmer credit for a ffty-dolar subscrip-
ton of stock in the district bank, on which he
is paid dividends as they may declared. and
the bank also sends to the farmer. through
the local association. the amount in money for
which he has mOrtgaged his farm.
The interest such loans is to exceed six per
cent and the minimum time of loan is five years
though il may ru-: in some cases long thirty
six years At any time after fve-year period, the
farmer may cancel the entire Indebtedness if he
wishes TO do
A particularly valuable provision of the new
system is that which enables tenant farmer who
has saved as much as fifty cent of the value of
a piece Of land he wishes purchase to pay this
fifty per cent to the land owner and borrow,
through the owner, from the farm loan association
the other fifty per cent with which to pay the
amount in full the tenant farmer assuming the
mortgage. The debt TO the owner thus being dis
charged the tenant has thirty-six years in which
to pay off the mortgage. At each interest-paying
period the borrower discharges a small portion of
amount of and by easy stages pays off the
principal.
Under this convenient plan the annual
payment, principal and interest loan
Of one thousand dollars for a period of
thirty-six years would amount to sixty-eight dol
lars and thirtynine cents except for the final year
when it would be seventy dollars and fifty-six
cents This illustrates the broadly practical purposes
which the Farm Loan act will serve. 1t enables
the average farmer to obtain credit for extended
period on terms which he meet without ap-
preciabIe burdens deprivations.
In addition to the farm loan associations, the
law authorizes the establishment Of Joint stock
land banks in each district, with minimum cap
ital of two hundred and fifty thousand dollars
These institutions, while privately owned will be
under the strict supervision of the Federal Farm
Land board They will be permitted to lend d
rectIy to the farmer and to deal generally in farm
loans without reference to the local associations
or the federal land banks of their respective dis
tricts.
The purposes for which loans may be obtained
are:
% To provide for the purchase Of land
for agricultural
C2) To provide for the purchase of
equipment, fertilizers and live stock necessary
for the proper and reasonable operation of the
mortgaged farm; the term equipment to be
defined by the federal farm loan board
ca To provide buildings and for the i'm