The Cordele dispatch. (Cordele, Ga.) 19??-1971, 1917-01-31

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| ture for farmer to secure money to
iHFa kesnepEied improvements or for the
purchase Of live stock, and it will be
easier also for the landless man to pur-
chase farm, according to recent
bulletin of the Departmental Agrt
culture, entitled 'Howsthe Tedsfal
EsParnf~Eoan Act Benefitsthe Farmer. "
The federal land banks established
dndeFThis act will stang ready az all
times, it is expected, to Lear msney
to farmers on farm-mortgage security.
The interest charges will be not more
than 1 per cent. above the rate paid
on the bonds sold byb the banks. If
41-2 per cent. bonds should be issued,
the rate charged On loans
would be IL per cent. or, less. There
Will be no commissions -trsPonuses.
The loans. will be made. for periods
Of time ranging from five to forty
years, thus doing away'with the trou-
,bIe and expense Of frequent renewals.
The payment of a certaArpart of
the princapa4 annually orrsemiannual-
ly, with the interest, willsbe required.
The total payment, including interest,
will be the same for each year, and
will be just large enough so that the
entire principal will be paid off at the
end 'ofN TIE period Fi4e ANNUAL pay
ment thus required to pay off loan of
81 900, with interest at S per cent, in
twenty years, is 1924.
After a loan has hun five years the
borrower will be permitted to pay off
the whole amount, if he. desires, on
any interest date, or ttoe make par
tial payments in addition to the regu-
lar installment.
The requirement of installment pay
ments on the amortization plan, as out
lined above, will serve, first to- cult
vate habits of thrift in the borrower,
and, second, to make possible the
of interest, since the gradual reduc-
ton of the principal constantly i'm
proves the security for the unpaid bal
ance. The privilege of optional pay
ments after the first five years leaves
the borrower free to discharge his
indebtedness before the end of the
lean eriod, if he finds it convenient
to do so.
The federal land bank will perform
three important services. First, they
will convert the security which farm
mortgages afford into negotiable
form. known as farm loan bonds Sec
ond, they will furnish additional Sc
curity for the protection Of these
bonds, through their capital and sur
plus, and thus make the bonds more
attractive to investors. Third, they
will sell the land bank bonds in the
open investment market, which, for
obvious reasons, the small farmers
could not reach to advantage,
The bonds are to be issued in de-
nominations ranging from $25 to ST.
600, and it is expected that the bonds
of small denomination will encourage
saving through their appeal to indi-
viduals who have not bee in the habit
of making Investments. The bonds
will be secured not only by farm mort
cages deposited in trust with govern
ment officials Che reistrar for the land
bank district, but also. as indicated
above, by the capital and surplus of
of the twelve land banks.
Moth mortgages and bonds will be
exempt from all forms of taxation.
Farmers who wish 40 bhtdfp money
from the federal land banks will ordi-
narily be obliged to Sf6rm local loan
associations, and to~get their loans
through these organizations. The local
loan associations WILL improve the
credit of their members and reduce
the cost of their loans through the per
formance of certain definite services,
among which are the following: The
committee called the loan commit
miuee" of the association will APP
praise the property offered as secur
ity and approve all APPLICATIONS for
loans which are sent to the land bank.
The secretary-treasurcr of the asso-
citation will transmit the papers and
carry on an Correspondence with the
land bank relative to the loans. The
association will guarantee the mort
cages of its members, the liability Of
any individual member being limited.
however to an additional sum equal to
the amount of his capital stock, or
approximately to per cent. of his own
loan. -
One important function of the new
System will be to establish safe, stand
ardF for the farm mortgage. business of
M tna6e States; for it is nor pro
-.IgsId to extend ANY credit except on
sihAAhasis of proper security In addi-
lion to the Endorsement of the local as
sOciation. every. Joan must haze the