Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1916-12-26

8 20 the federal farm loan act. and an en-
deavor has therefore been made 10 sup
r ply this information as succinctly as
possible. The object OF this act is TO
d lower and equalize interest rates on
first mortgage farm loans. These loans
= Will be arranged TO run through long
. period OF years. thereby privileging the
borrower 10 repay on the installment
plkn- The money will be loaned on the
: assembled farm credit OF the community,
. and eventually, the nation. The purpose
OF the act is TO aid farmers through CO.
: operative action to capitalize their lands
&, for. the purpose OF securing loans there
j on II is thought that through the me-
dunn OF this act IL viii be easier for ten
ants TO buy land in the future. and il Is
believed that the bonds issued through
the federal farm loan banks will provide
a desirable long term investment for
thrifty people.
This act became a law on July II,
1915. The direction of the operation or
the act is left IN the hands of a board
OF I'VE men. and provision Is made for
the establishment of twelve federal loan
banks Ten farmers getting together ana
following the instructions OF the federal
farm loan board will be able to borrow
money from the federal land banks when
they are located. This has not been done
as yet, though many hearings have been
held IN various sections OF the country,
and IL is believed that the announcement
Of the location selected Tor the various
banks will be made at an early date IL
In to be hoped that the southeastern
tatss viii secure one OF these banks, and
n would seem very desirable that one
should be located in Georgia as il is in
tended that they shall be established so
as 10 serve the interests Of the farm
srs 20 the best advantage. The federal
land banks will start with a capital or
$4,000, and will get additional money by
Ioaning. by automatic increases in Its
capital stock, and through the sale OF
bonds.
Any one may own stock in federal
r and bank, though the purchase must De
: made promptly as il wiz ve taken OF the
market at the end of thirty days. and
: any not purchased by that time will be
taken by the government The voting
power of the stock is confined TO the
government and the national farm loan
association, and il is presumed that divi-
dends viii be paid on all stock except
= that held by the government.
= The capital stock of the bank viii be
I. increased by reason OF the fact that as
soon as $4,000 has been loaned. IL can
take the mortgage represented thereby
and issue $4,000 bonds thereon. and thus
secure another $50. 900 to loan to farmers
Thus a bank with a capital stock or
/. sTs0, 900 could have an ultimate earning
, capacity OF t15.OOO.S0o. Naturally. 1t Is
expected that the government stock will
be paid on and retired as subscriptions
by farm loan associations increase
The banks will be governed through
the nomination OF five directors from
ne district in which they are located
blythe federal farm loan board When
the loans amount to 100000 the bank
is to have nine directors. six elected by
the national farm loan association OF
the district, and three by the federal
farm loan board Farmers who desire
20 borrow from the federal land banKs
) must apply for membership in the near
! est federal farm loan association IL
no such association exists they must
md ten farmers living in the commun-
ity who desire to form an association
and become borrowers These ten farm
ers should then make application N
writing to the federal land bank for a
charter. Blanks will be furnished for
this purpose, which must be signed and
forwarded TO the federal land bank An
81 appraiser will then be sent 10 inspect
e the security. and IL satisfactory, the
loan will be authorized. The money s
then advanced TO the secretary-treasurer
OF the local association, who is bonded
officer. The value of the security Of
q
termined by a committee OF three mem
= bers and must be confirmed by an APP
praiser OF the federal land bank before
6 accepted
A farmer can not borrow less than
slBo or more than $4,000. National
; farm loan associations may not start
with less than $4,000 in loans. Farm
ers who are about 10 purchase land may
Join these associations and become Dor
Wnh ha
under this act TO beneft the actual farm
& er had not the landlord or the specu-
lator. Fifty per cent OF the value OF the
land and 20 per cent Of the value OF
permanent improvements can be bor-
: rowed In other words. II land is ap-
praised at $4,000. $500 could be bor-
. roued thereon Titles will be examined
free, but the borrower will have TO pay
for the abstracts Of titles. The local
association may employ a man TO pro-
vide abstracts. and thus save expense
Amortization Is the term applied TO the
process OF reducing an Indebtedness by
payments on the installment plan
through a period Of years Arrange
: raents have been made where loans may
> run from five to forty years The in
: terest on the loans will be determined
by the rate at which the bonds sell. For
Instance. IL they sell at 4 per cent. mon
ey can be loaned 10 the farmers at
per cent as the banks share only allow
, ed per cent margin on which to oper-
ats In no event will the interest rate
to the farmers be more than per cent,
and Il Is hoped that IT can be reduced
Considerably in the course OF time De-
yond per cent
The secretary-treasurer OF the local
farm loan association is required to col
2 lect the payments from the borrowers. To
do this he Jumps both interest and
principal together and divides into equal
annual or semi-annual payments. BOr-
xovers may pay on their loans before
maturity at any date after the mortgage
has run for 1--WE years Farmers who
become members OF the association are
required to buy the equivalent Of per
cent OF his loan IN the stock OF the assO-
citation This is held as collateral Sc
curIty until the debt is paid when the
( money is returned TO the farmer, and
he may II he so desires use IL as the
s~st payment Of his debt The loan as
aOciation uses its money TO buy stock OF
the federal land bank. thereby increas-
. Ing the banks capital so II can make
more loans TO farmers Individual MEM
eerr e the loan association are only
sssaie ror 10 per cent In other words.
!. their liability is not unlimited in respect
: 20 the debts OF the association as some
. have thouxht