The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1917-01-05
REVIEW. OF THE FARM LOAN ACT

The rural credits law, as 1t Is
popularity called, was signed by the
president July II, 1916. Its purpose
is to help the farmer to finance him.
self by the aid of money gathered
by farm loan banks from a large mum.
Der of small investors. He is to
mortgage his farm to a local branch
of the federal organization, and have
long period of time to repay 1t in
installments.
There are twelve farm loan dis
tricts, and each has its federal land
bank, which Is required to have q
subscribed capital stock of not less
than $750,000, each share to be IS.
What stock shall be unsold will be
bought by the secretary Of the treas
ury for the United States.
The loans will be made thru local
associations in neighborhoods. Ten
or more land owners or persons about
to be in the possession of land, which
would be security for mortgage,
may form such local organization.
They can apply for loans in aggre-
gate up to $4,000. Each member
must take stock in his association to
the amount of Ave per cent of the
amount he wishes to borrow, and this
stock is held as security by the as
ISOLATION until his loan is paid. If he
has no money to start with, he may
have the price of the required stock
deducted from his loan, provided he
has land that is proper security. Each
stakeholder in an association is Ii
able for the acts of the association
UP TO twice the amount of his stock.
The purpose for which the loan
is desired must come under some
of the following Sheads:
To provide for the purchase Of
land for agricultural uses.
To provide for the purchase of
equipment fertilizers and livestock
necessary for the proper and reason
able operation of the mortgaged
farm; the term equipment" to be
defined by the federal board.
To provide buildings and for the
improvement of farm lands; the term
Improvement to be defined by the
federal board.
To liquidate Indebtedness of the
owner of the land mortgaged, exist
ing at the time of the organization
of the first national farm loan as
ISOLATION in or for county in which
the land is situated, or Indebtedness
subsequently incurred for one of the
purposes mentioned in this section.
Some of the provisions are:
No individual can borrow more
than $4,000, or less than 500.
No loan may be made for more
than SO per cent of the value of the
land mortoaged, and 20 per cent OF
the value of the permanent insured
improvements upon it.
~ The loan must run for not less
than and not more than 40 years.
Every mortgage must provide for
the payment of the loan under an
amortization plan by means of a
fixed number of annual or semi-an-
all interest and pay soff tire debt by
the end of the term qA the loan. The
bank is given the "a kr to protect
itself in case of defauic~by recalling
the loan in whole or part.
No federal land bank is permitted
to charge more than 6 per cent on
its loans, and in no case shall the
interest charge on farm mortgages
exceed by more than one per cent
the rate paid on the last issue of
bonds. If the bank pays 4 per cent
on an issue of bonds, it can not
charge for loans of that money more
than per cent
The act was hailed with enthusi-
asm upon it's first appearance, but
seems to be slow in taking root. The
first requisite is cooperation among
ten or more farmers living in
a certain section.