St. Johnsbury Caledonian. [volume] (St. Johnsbury, Vt.) 1867-1919, 1916-04-05
Possible Help For Farmers.


After years of investigation and agi~
tation congress has before it for con-
sideration a National Farm-Loan Act
known as the Moss-Hollis Bill that
there is promise may be enacted into
law. Unless prevented by the more
serious business of considering our
foreign relations the house will begin
consideration of this measure next
week The title of the bill sets forth
these objects:-To provide capital for
agricultural development, to create
standard form of investment based
upon farm mortgage, to equalize rates
of interest upon farm loans. to furn-
ish a market for United States bonds,
to create government depositaries and
financial agents for the United States
and for other purposes.
The bill provides-for federal farm
loan board and under it's supervision
lied. one in each of the twelve dis
tricts into which the country will be
divided, each bank to have a capital
of not less than 100000. These land
and deposit with the registrar the
mortgages that secure them and issue
bonds against the mortgages. These
bonds are to bear a low rate of inter
est-one per cent lower than the in
terest on the mortgage-and be ex-
empt from taxation. 1t is expected
the rate of interest on the bonds will
be four per cent and this will be the
net income to the owner of the bonds.
The loans are to be made through
local loan associations made up of ten
or more persons who desire to Dor
row money. They must approve of
the loan before it will be granted by
the land bank and accept a certain liza
bility for its payment. The local
loan associations must become
stockholders of the land banks to the
extent of five per cent of the loans
made to their members, each one of
which must hold at least one share in
their local association. The loans can
not be for more than fifty per cent of
value Of the mortgaged property.
The loan can run from five to thirty
six years, the interest and a portion
of the loan paid every six months,
enough so the loan will be entire
ly paid at the expiration of the term
for which it is made. 1t is expected
the rate of interest on these loans
will be five per cent, not much of a
saving for Vermont farmer, but in
the West and South where they are
paying ten and twelve per cent a
great saving.
The bonds will have back of them:
The personal obligation of the Dor
rover; the real estate mortgaged,
carefully appraised to be worth twice
the amount of the loan; the indorse-
ment of the local association or agent
of the Federal land bank; the capt.
tal-not less than $5OO,OOO-and sur
plus of the Federal land bank; the
guaranty of all the Federal land
banks (12); the approval of the bond
issue by the Federal Farm Loan
Board; the protection of Government
supervision similar to that of the
national banks; the amortization pay,
ments which the borrower is obliged
to make at every interest-paying per-
iod. thereby increasing the security,
or rather diminishing the debt, con-
stantly toward the vanishing point.
The purposes for which loans can
be had are clearly set forth to be:
To provide for the purchase of a
farm for a home.
To provide for the purchase of
equipment, fertilizers, and live stock
necessary for the proper and reason
able operation of the farm, the term
equipment" to be defined by the Fed
eral Farm Loan Board.
To provide buildings and for the i'm
provement of farm lands.
To iquidate indebtedness of the ow-
ner of the land mortgaged existing at
the time the loan association is es-
tablished or incurred for one of the
aforementioned purposes.
Senator Fletcher of Florida in dis
cussing the measure said of the bill:
zone of the first effects will be to re-
duce the charges, expenses. commits
sions. and interest now borne by the
farmers of the country on loans. about
one-half. This will save to them an
annual outlay of some 100000. 900.