Polk County observer. (Monmouth, Polk County, Or.) 1888-1927, 1917-02-02
FARM LOANS EXPLAINED.
FRANK R. WILSON REDUCES
LAW TO SIMPLE WORDS.
Ten OF" More Farmers Who Wish te
borrow Can Form Themselves
Into Associations.
by Frank R. Wilson, of the Federal
Farm Loan Bureau

Fafm Loan Bureau
The right 10 borrow under the
Farm loan act is limited to farmers
prospective farmers. Farmers or prns-
peetlve farmers who wish to borrow
group themselves into farm loan as
soelahons, each association being
composed of 10 or more farmers and
each association starting with a min.
mum OF at least $4,000 of loans
10 JOIN, a farmer merely makes an
pheatlon to the seeretary-treasurer
Oh the loan association in his eommu-
nlty- Ii none has been organized he
should get together the required num-
Der OF borrowers and organize an as
soelatlon- The federal farm loan board
at Washington will furnish. on appli-
cation, a blank form of articles of
association for such organizations
Then the organizers meet and adopt
these articles and sign them and the
seeretary-treasurer makes an affday-
IT. thereto. This association then
elects i've or more directors, and the
directors then elect a president. vice
president, seeretary-treasurer and a |
loan committee of three members.
As soon as the federal land bank
OF that district is ready for business.
1t Will provide this local association
with additional blanks, including an
application for charter and blanks
for the loan committee to use in the
work of appraising the farms. As
'oon as the loan committee is elected Il
{ may proceed to appraise the farms
Ipon which mortgages are to be plac-
ID Its report, which must be unani- ,
1Ous, must accompany the signed ar
ieles of association and be filed with :
ne federal land bank of that dis
net. When this is done, the apprais
r Of the federal land bank will come
0 inspect the security and accept OF
eject the report Of the loan eom-
littee.
No one farmer may borrow more
han $4,000 nor less than 500. No
atiOual farm loan association may
tart with aggregate loans less than
10000 If John Smith. a farmer,
esires to borrow 5000, he invests
1 the stock Of his local loan asso-
lation one twentieth Of this amount,
r 800. His association then in
sstS this money II the stock of the
sderal land haEk.- szzallng it thus to
,erease It's eapizzl stuck 80 SIS to
axe anothsf koxz q s9s9 to some
.her farmer. The borrower gets
: investment bSek wen lie pays of
5 loan. or he Uzy sZrz II in as the
st payment on his kan
Farmers are required TO form these
CARNATIONS so that they eventually
III control the federal land banks,
aeh association votes in the election
the directors of its federal land
INK. Each association has a loan
mmittee. which values the land of
members subject to the approval
the land bank appraiser and the
ieral land bank. Each association =
$ a board of directors, which has
! power TO exclude or admit new
mbers by a two thirds vote. 1t is
'ough this local loan association
It the farmer invests the money to f.
used for increasing the capital
ek of the federal land bank, and
5 is how the farmer comes into
session of his own banking system.
Farmers are permitted to borrow
to 30 per cent of the appraised
ne Of their land and 20 per cent of
appraised value of the permanent
nred Improvements thereon. 1t is
necessary for borrower to be an =
ual land owner when he joins, but -
landless man must use the bor-
7ed money to purchase land which
intends to Immediately begin
ming. Another chapter viii be de-
ed to this feature.