Cut Bank pioneer press. [volume] (Cut Bank, Mont.) 1909-current, 1916-08-11
Farmer PROFIT
BY new LOAN ACT
Measure Designed to Give Him
Money on Long Time and
at Low Rate.
Big BANK SYSTEM CREATED
Borrowers 90 Form Local Associations
and Share in Earnings From the
Operation of the Plan.

TINS farmers of t1a United States
are to be the chief beheficiaries of the
Federal Farm Loan Act, through
which Uncle Sap is enabled, by
e of a rural credit system, to
assist egriculturists to borrow money
at low rates of iaterest for the pur-
pose OF buying aud improving land.
This act, which is now a law, is
the result of years of agitation and
study 1t is designed not only to
enable farmers to borrow money at a
low rate of interest but to make 1t
possible for them to secure these
loans for relatively long periods of
time and on such conditions that loans
can be repaid in annual or semiannual
instnllmentr which will be less in
many cases than the interest that
they are now required to pay on sim
liar loans.
To attain this object, two farm
mortgage systems are provided:
First, a system operating through
joint-stOck land banks.
To attract money to the farm loan
field, the act provides a method where
by those who have money to lend can
find safe investments in the form of
debentures or bonds, of small and
large denominations, issued by the
banks and based on the security of
mortgages on farm lands.
These two systems are to be under
the general supervision Of a Federal
Farm Loan board in the treasury de-
partment, composed of the secretary
of the treasury, as chairman ex-ofticio,
and four members appointed by the
president. This board has authority
to appoint appraisers, examiners, and
registrars, who will be public officials.
Federal Land Bank System.
Under the federal land bank system
the act provides for federal land
banks which make loans, for the first
II months, exclusively through local
national farm loan associations COM
posed Of borrowers. These ~associa-
lions shall be shareholders in the
banks and in that way the members,
who are the borrowers, will share in
the profits of the bank. The money
for the loans Is to come partly from
the capital of the banks and partly
from the sale by the banks of bonds
secured by first mortgages on farm
lands. The act defines strictly the
purposes for, and the conditions I'M
der, which loans are to be made, and
requires that the rate of interest
charged shall not exceed 6 per cent
per annum.
The United States shall be divided
into II farm-loan districts, and a fed
eral land bank with a subscribed cap
ital of not less than %$750,O00, each
share SIS, shall be established in each
district. Each federal land bank may
establish branches in it's district.
Within 80 days after the capital stock
Is offered for sale it may be purchased
at par by anyone. Thereafter, the
stock remaining unsold shall be
bought by the secretary of the treas.
,ury for the United States. 1t is pro.
vided, however, that the government
shall not receive any dividends on
its stock. Ultimately, it is intended
that all the stock in the banks shall
be owned by the associations of Dor.
rowers, and provision, therefore, is
made in the law for transferring the
original stock at par to these associ'
atoms.