Daily capital journal. (Salem, Oregon) 1903-1919, 1916-12-23
APPLICATION OF FFARMLO
ACT EXPLAINED IN DETAIL


Farm Loan Board is constantly met
with the question. How may farmers
secure the benefits of the farm loan
act, recently passed by Congress! The
purpose of the law is we'll understood,
but there is uncertainty as to how
farmers shall proceed to secure the
! benefits of cheaper money rates to buy
land and to improve it.
As explained by members of the
Farm Loan Board, the procedure under
the new act is substantially this:
Any group of 10 farmers living in
any locality in the United States may
| unite and form farm loan associa
tion. That is the least number the law
allows. More members would be bet
ter, but 10 is enough. These 10 or
more men must be farm owners. They
are supposed to live in the same coun-
ty and must unite to secure loans of
from 800 to $4,000, at per cent or
less, on mortgages to run for from to
10 years. None but farmers are clig-
ible for membership.
The word having been passed around
that a farm loan association is to be
formed those who wish to join are
required to meet at some convenient
place and appoint committee to draw
up articles of association. These ar
ticles should explain the objects of the
association and the territory within
which it proposes to do business.
Prescribed Form Followed
These articles may follow pre-
seribed form. which will be furnished
by the local land bank in that com.
munity, or may be modified to suit the
needs Of that particular locality or
body Of farmers, but must not contain
anything that violates the letter or
spirit Of the law. Each farmer mem
Der must sign these articles. 4 copy
is than sent to the district Federal
land bank and filed for future refer
ence.
All requests for loans must be
passed upon by three members of the
association. After this committee has
examined the lands on which loans are
sought, they must all three sign
written report that they have exam
ined the lands and appraised their
value. The report of the committee
must be unanimous, or it will not be
considered. The lands and farms
should be described and the value of
those upon which loans are desired
should be stated,
1t is held to be important that fair
valuation be put upon the property.
This appraisement is not binding upon
the land banks, and is subject to re-
vision by the land bank S appraiser.
An affidavit must be sent to the
Farm Land Bank, along with the ar
list of the proposed members. and the
report of the loan committee. This
affidavit must be signed and acknowl-
edged by the members, and by the sec
retary-treasurer of the association. 1t
should set forth that each subscriber
is the owner of farm land, or is about
to become the owner of farm. A
person who is not actually the owner
of farm but seeks to become such
owner, may join the association. The
affidavit should further set forth that
the aporegate for the loans sought at
least $4,000.
When Charter is Granted
Upon the receipt and approval of
this affidavit and accompanying ar.
ticles of incorporation and list Of mem
bers, a charter is granted by the land
hank to the loan association. New
members NAV be admitted in any mum.
ber by complying with the law, after
the association is organized with at
least ten members and makes appliea-
tion for $4,000 or more.
Members buy shares in the associa-
tion to the extent of $5 for each 800
of the amount Of their loans. A farm
er borrowing, $1,000 must take ten
shares of stock and ray $50 for them,
This stock may be paid for in cash or
sinemded in the amount of his loan.
His loan il limited to one-half the
value of his land, and one.fifth of the
value of permanent improvements
thereon. The shares of stock thus pur
chased by members are held as security
by the association. If the association
proposes, dividends on this stock must
be paid to the owners.
When the debt of member is paid
off his stock is Cancelled and its value
returned TO him. This payment for the
stock automatically removes the farm.
er from the association As long as hel
is a member, each farmer is liable for
the debts of the association in an
amount equal 20 twice the value Of
his stock. A member holding one share,
in case of the failure of the associa-
ton. would be liable for S. more.
The money paid into local farm loan
associations for stock is turned over to