The Idaho recorder. [volume] (Salmon City, Idaho) 1886-1927, 1917-02-16
BENEFITS or LOAN ACT.
Ways in Which New System Furnish
es Aid TO Farmers In Financing His
Business.

IS Aid 20 Farmers In Financing His
Business.
BY reason OF the facilities created
by the Federal farm loan act. which /
was passed last sumner, il will be
easier In the future TO secure money
10 make needed improvements or for
the purchase az livestock. and II viii /
be easier also for the landless man
10 purchase a farm. according TO q re-
cent publication of the United States /
department OF agriculture tFarmer's
bulletin 1922 entitled How the Fed /
eTal Farm Loan Act Benefits the
Farmer"
The Federal land hanks established /
under this act will stand ready at all /
times, IL is expected, TO lend money /
TO farmers ON farm. mortgage security. 4
The interest charges will not be more
than per cent, nor more than ! per
cent above the rate paid ON the bonds
sold by the banks II AZ per cent
bonds should be issued, therefore. the
rate charged on loans would be So
per cent or less, There will be nn
commissions or bonuses The loan
will be made for periods of time
ranging from to 40 years. thus doing
away with the trouble and expense
of frequent renewals.
The payment of certain part OF
the principal annually or semiannu
ally, with the interest, win be re
quired The total payment. inelud
ing the interest viii be the same for
each year, and viii be just large
enough so that the principal viii be
paid of at the end OF the period The
annual payment thus required to pay
of loan OF $1,000. with interest al
| per cent, In 90 years, is sS0.24.
After & loan has run S years the
borrower viii be permitted To pay off
the whole amount. IL he desires, on
| any interest date or To make partial
payments in addition TO the regular
installment
The requirement Of installment pay
ments on the amortization plan, as
outlined above, will serve. first, To
cultivate habits OF thrift in the Dor,
rover, and second. To make possible
/ the placing OF the loans at lower
4 rate of interest, since the gradual re
duction of the principal constantly i'm
proves the security for the unpaid
balance. The privilege OF optional pay
ments after the frst years leaves
4 the borrower free TO discharge his in
ldebtedness before the end of the loan
The Federal land banks viii per
form three important services, az
They will convert the security which
farm mortgages afford into a negoti
able form. known as farm.loan bonds
(2) They will furnish additional Sc
curity for the protection OF thes,
bonds, through their capital and sur
. plus, and thus make the bonds more
attractive TO investors CD They vii
I send the land.bank bonds in the opei
investment market, which, for obvi
Gus reasons the small farmer coul'
E not reach to advantage,
( The bonds are TO be issued In dc
Y nominations ranging from S25 4
81 81 900, and II is expected that III
!. bonds OF small denomination will er
/ courage saving through their apnea
/ TO individuals who have not been 4
9 the habit of making investments. tn
l. 4bonds will he secured not only b
J. farm mortgages deposited In trua
with a government official (the regii
trar for the land bank districD b0
n also as indicated above, by the cap
r tai and surplus of the IL land banks
/ Both mortgages and bondA will b
n exempt from all forms OF taxation.
T Farmers who wish 10 obtain none
z from the Federal land banks will o.
a dinarily be obliged TO form local loa
n associations, and get their loans
y through these organizations. The i
n cal associate will improve the cree
i Il OF their members and reduce IN
cost of their loans through the pc
Torrance OF certain definite service
r among which are the following tn
e committee called tho loan commi
y tee" of the associa ION will apprais
d the property offered as security an
20 approve all applications for loar
which are sent TO the land bank. II
y secretary.treasurer Of the associate
d will transmit the papers and carry 9
s all correspondence with the land ban
y. relative to the loans. The associate
ID will guarantee the mortgages OF i
z. members. the liability OF any lndiyi
al ual member being limited, howeye
n to an additional sum equal TO u
~ amount OF his capital stock, or a
Iproxlmately 10 5 per cent OF his ON
= loan.
One important function OF the ne
& system will be to establish safe sta
z dards of the farm mortgage buslne
= OF the United States. for II II n
q proposed TO extend any credit .
2 cept on the basis OF proper securil
= In addItlOn 10 the lnuot hfNifhR VI "
& local association, every loan mu
" have the approval OF one Of the salt
led appraisers appointed by the &C
n eminent for the several land banl
VI Further, not more than $4,000 IN
" be loaned to one borrower, nor mo
N than 50 per cent OF the value OF [
" land offered as security plus 20 ,
~ cent OF the value OF the building
n and the money must be used for sp'
W fled productive purposes. such as
- purchase Of farm land, improvement
" equipment. fertilizers, OF live Hto'
= or for the payment Of existing inde
- edneEs
The Federal farm loan land boa
OF the treasury department has gen
al charge Of the system. The depa
ment Of agriculture viii cooperi
with this board in supplying inforu
ton and rendering assistance to FAR
ers who desire 10 take advantage
the Federal farm loan act, especia
II tn he