Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1917-01-20
Nsi0 Farm Lons, La,O
Brin0s Land G sOsssrs
and Investors Together
ARrrcrIn ~.

ID 81
ARTfCG@ ~.
IBy Frank r. Wilson. Federal 1Arm
Loan BureaM1
Farm lands hove always, beSn re-
garded a. the sk.est security IN the
world. But loans made against farm
ands have generally exacted . higher
interest rate than loans made ON. other
good security.
There are several reasons 1or this. III
Such loans are not readily transfer-
BILE, /. O.. marketable. Farm loans are
usually desired for long periods. y
of little value to the farmer II the
Dan il made for the purpose Of buying
land the farmers chance to pay It on
Is to make the money out Of the land.
t Is against reason to expect that land
Will pay for itself in ave years.
Well-managed commercial banks can
OF make q business Of lending money
on farms and carrying tho loans them-'
selves. It IL not good banking. Il
ties up their funds In permanent IN
yestments and II psrsisted In continii-
ally would ruin any bank This fact
limits the supply Of local money for
farm loans and partially accounts for
high interest rates on them.
The farm lands Of the United states
constitute great mass Of valuable a.
sets against which money ought to be
borrowed at fair rates Of interest. But
1t has been a chaotic mass OF value.
No agency has ever undertaken 20 as
semble this mass Of assets into negod-
eole form so that it could be readily
handled a. a marketable security.
0evsrnmsnk Provides Pooling Agency.
Now the government steps in and
provides this agency. 1t says TO the
farmer who wants to use his land -
security:
you Join national Farm loan 80.
ISOLATION and contribute your mort
gage to great federal land bank pool
Of mortgages. We have provided the
for this purpose and adopt-
ed rules for Its operation so that the
interest Of all will be eafeguaSded
When your mortgages are massed to-
gether. federal land bank will take
these mortgages and Issue bonds
against them; sell the bonds-to invest
ors, and relend the money TO farmers.
The pooled mortgages Of the farmersiof
the United States will be security for
every.e-bond The high character Of
this security means that people who
have money to invest will jump at the
chance to put their savings up against
your security at = low rate OF interest,
We will let you have this money at ac-
tual cost to u.s. plus not to exceed ! per
cent to cover the cost Of operating this
money-assembling and money-iending
machinery"
Protection Given Investors.
Then Uncle Sam turns to the invest
or and says:
1--WE have enabled the farmers Of the
United States to give US their massed
mortgages. We are Offering you bonds
which are in reality first mortgages
against the farms Of all who Join this
pool. 1t is the best security In the
world. because every dollar farmer
borrows is represented by Sc worth Of
land plus the stock each farmer has
purchased In his iooai association. To
make these bonds even more attract
i've, so as to eventually give the farmer
a lower interest rate. No have exempt
ed them from ali forms OF taxation.
Even Uncle Sam VIII not collect any
tax from them. nor from the income
upon them. No state or municipality
may tax them. We have these bonds
in small denominations from S25 up-
ward 90 their purchAse VIII be easy
among people with small savings, and
we win have the bonds printed and en-
graved by the government bureau Of
engraving and printing to protect them
against counterfeiting, and the United
States secret service Will watch over
them" ~
So the farm loan net. In addition to
money for land purchase and
firm development, provides new
4 rm Of security which ought to be-
{ ,me one Of the most popular in ex-
ittence. because II ID based on the land
values Of the entire country.
Mondays instaltment will be devoted
to a discussion Of how the farm loan
ac. may help to reduke farm tenantry
and will be Of particular interest to
the landless.