American Fork citizen. [volume] (American Fork, Utah) 1912-1979, 1916-08-12
FARM LOAN ACT
Federal Governments New System OF
Lending Six Per Cent Money on
Long Time PnymrnLs.

latiyc passed by the procnt congress
Is the Farm Loan Act which viii
make It possible for every farmer in
America to secure six per cent money
on long time mortage loans. The
bill was signed by the President and
became law July z. 1916.
There are two systems, one opcrat-
ing through regional land banks, and
the other operating through Joint
stock land banks. Both are under the
general supervision Of Federal
Farm Loan Board which has already
been appointed by the President Tho
first system Is the ono that will prob
ably be the more generally used.
Farm Loan Associations.
Local farm loan associations are TO
be organized.
Ten or more persons who own and
cultivate farm land qualified as Sc
cuIity for u mortgage loan under the
act or who are about 10 own and cul-
tiyatc such land, may form such an
association, provided the aggregate of
the loans desired by the membership
is not less than $4,000 Each mem
her must take stock In his assoCia- }
ton 10 IN amount equivalent to 8 per
cent of the amount he wishes to Dor
row. This stock the association holds
In trust AZ security for the members
individual loan. The association
in turn, when applying for money
from the bank. must subscribe for ,
stock in the bank to an amount {
equivalent TO 8 per cent of the sum !
~ wants to obtain for its members.
This stock Is held in trust by the
bank as security for the loans II
makes through the association. II a,l
borrower has no money =,
with which TO pay for his association d,
stock. he may borrow the price Of that q,
stock as part of the loan on his q,
arm land.
Under this PLAN then every borrow I
n must be stakeholder in his local o
association, and every association
stakeholder In its district o.
-nR Each stakeholder in an
ssociation is liable for the acts of
hat association up to twice the Il
mount OF his stock &c
How Loans Are Obtained. n
A member OF q national farm loan I
before obtaining loan =
must first fiji out an application /
blank supplied to the loan association
by the Federal Farm Loan Board. ,
This application blank and other ne
ressary papers will then be referred
To n loan committee or the association
which must appraise the property Of
fered az security. Such applicants as Is
anproyed by the loan committee Is then
forwarded TO the Federal land bank
and must be investigated and report
cd on by salaried appraiser OF the
hank before the loan Is granted. This
appraiser Is required to investigate the
solvency and character OF the pros
pective borrower as we'll rs the value
Of his land. When loan Is granted
the amount Is forwarded 10 the bor-
rover through the loan association.
Conditions Under Which Loans Va.
BE Obtained.
The act specifically defines the pur-
noses for which loans may be obtain
cd These are:
Cal TO provide for the purchase OF
land for agricultural uses.
(b) TO provide for the purchase n.
equipment, fertilizers, and live stock
necessary for the proper and reason
able operation of the mortgaged farm
the term equipment" to be defined b,
the Federal Farm Loan Board.
(c) TO provide buildings and for tn
Improvement Of farm lands; the tern
Improvement" to be defined by tn
Federal Farm Loan Board
Id To liquidate indebtedness Of III
owner Of tho land mortgagod eXistin
At the time of the organization OF III
first national farm loan associntio
established IN or for the country
which the land mortgaged is situate
or indebtedness subsequently incurrC
for one of the purposes mentioned
this section.
Loans may be made ouly on fir
mortgages on farm land
Only those who own and cultivo
farm land or are about TO own al
cultivate such land are entitled
borrow,
No one can borrow save for {
purposes stated in the act and tho
who after borrowing do not use {
money for the purposes specified
the mortgage are liable to have tn,
loans reduced or recalled The seer
l. 40. 4