Arizona republican., 1916-08-07
rRepublIcan A. p. Leased wirel

WASHINGTON, Aug. b.-Atter many years of investigation and de- hate to develop the hest method of providing financial aid for the far mer at normal interest rates and on lorg time, congress has passed a farm loan act, President Wilson has named mem lers of the board which will ad- minister it's provisions. and the wor'l of organizing the vast new system is about to begin.
 Secretary McAdoc eX-officia mem Der of the farm loan board, which will be at the head of the system, predicts that 1t cannot be in operation for at least six months and probably loans cannot be made before next spring: \
 Tn operation the system to some extent will do for the farmer what the federal reserve system does for the business man. The farmer will be given opportunity to secure money cn his most available commodity, his land. just as the merchant and man. ufacturer has been enabled through the federal reserve system to have his paper, based on commercial trarsac- tions. find a ready market.
 The new scheme has many points of resemblance to the federal re- serve system but in many essential features it is entirely different. In no way will the banks created under it do commercial banking, and while it is possible that years to come they may have funds to loan that will amount to several hundred million dollars, it is not believed probable that the system ever will have the re- sources of the reserve system.
 The act provided for a division of continental United States into twelve
 land bank districts, with a federal land bank in each. The work of designating these districts and select ing tho centers at which the loan banks are to be located will be the first important duty of the farm loan board and is expected to result in just as many bitter contests as pre- ceded the announcement Of tho linos uf the twelve federal reserve districts and the location of federal reserve banks. The only directory provision in the farm loan act says that land banks shall be located with particular reference to the farm loan needs of the country. so the board will have wide discretion. Many applications from cities, particularly in the north west and southwest already have been filed in the treasury but the board will not make public its con- clusions until it has travelled over the country and held hearings in many states.
 Each federal land banl, must have a minimum subscribed capital of ST51 before it can start business. If with in thirty days after the books ara onened For subscriptions to the stock of any of these banks individuals ol corporations have not subscribed that amount the secretary of the treas urV is directed to subscribe for ths United States in the needed sums Stock in the banks may pay dividends when earned but the United States 1 as stocllholder cannot participate witt ether.
 ] The banks will rot. except in spec ! ial cases, loan direct to farmers. bu i through the agency of National Earn Loan associations. which may be or ganized to any number in a land banl district by any ten owners or pros i pectiVe owners of farm land who de | sire to secure loans on farm prop erty. Applications for charter fol ! these associations must go up to th' | farm loan board and may be refused i by it. No association will be chart cred unless 1t is shown that signing i members desire loans totaling at leas | S20. GOO
 | In applying for membership in al association. farmer must take fiy, l per cent of the face value of tn 1 desired loan in stock of the associa
 tion.
 Applications for loans are to b passed upon ny q lo2n committee O the farm loan association. Loans vii
 be made only on first mortgages O farm property and the value of tn land will Ee the main consideration The lanG will be subject to inspection by m appraiser of the farm loal board Loans will be made only fO purchase of land, for it's improvement or for purchase of live stock. equip
 nent, fertilizers, or to provide build ings on farm or 10 liauidate indebt
 edness, existing when the first as
 soclation is formed in the count where land is located No loan wi
 be made for more than si0.000 nor les
 than S100 Interest will not charged greater than six per cen The loan itself will be reduce
 through an amortization plan pro
 viding for reduction by annual 2
 semi annual payments on the prin
 ciral. No mortgage shall run fO
 more than forty years TOT less tha
 five years and there arc the neces sarv provisions in the law for satis
 faction of overdue interest or amor
 tization payments.
 The money to be loaned will com l through the federal land banks passe
 to the hands of the National FarI
 Loan associations and to the farme 6sfp{;;frtpc31S95s9