Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1917-01-27
FAR M LOANS
Farmers Who Wish to Borrow Money May
Join National Farm Loan Associa-
tion Under Federal Act.

| by Frank r. Wilson, of the Federal Farm Loan
| Bureau
Washington, ID. c., Jan. 20.-Only
farmers or prospective farmers who wish
to borrow money may join the national
farm loan association provided under
the federal farm loan act 1t takes ten
or more TO make up one these associa-
tions. If a farmer wishes 10 borrow he
should find out If such an association
has been formed in his community. If
it has, he should make application to the
secretary treasurer for membership. If
no association has been formed he should
attempt to get ten or more farmers who
wish to borrow for the purpose of organ
izing.
The process Of organizing is very sim.
pie. One Of the members should write
to the Federal Farm Loan Board, Wash
ington, d. c., for blank articles of asso-
citation. When they have been received
a meeting of the prospective borrowers
should be called and these articles of
association should be adopted signed
and acknowledged by each member
Each member will indicate the amount
he wishes TO borrow and the value and
as security.
This association elects five or more
directors, and these directors then elect
a president, vice president, secretary
treasurer, and loan committee of three
members.
This Is as far as the association can 90
until after the federal land bank of that
district is established. Then upon APP
plcation, the federal land bank will fur.
nsh the local association with blank
application for charter, which should be
filed out and filed with the federal land
bank along with the articles of associa.
ton
These documents should be accompa.
MED by q written, unanimous report Of
the loan committee placing valuation
OF the lands of each of the members
Then the appraiser of the Federal land
bank will come to inspect the lands of
the members and o. X. or reject the
valuation prepared by the loan commit
tee.
No one farmer may borrow more than
ISlO,OOOOO nor less than 500. No ma
tional farm loan association may start
with less than $4,000 of loans.
Each member joining the local asso
citation must buy stock in the association
equal to five per cent of the amount he
borrows If he borrows 81 900 he will get
$3.50 in cash and a certificate of stock for
$50. Or he may make his loan $3.50 and
thus have net loan Of 500, taking as
long time to repay the $50 invested in
stock as on the thousand borrowed.
This investment is for the purpose of
providing the increasing capital of the
Federal land bank, and the local associa-
ton invests it in the land bank stock
The borrower will get his money back
when he pays of his mortgage, and will
get what dividends it earns while it is
invested.
Now, what is the object of requiring
the borrowers to thus group themselves
into loan associations? Primarily that
the loan associations may eventually
own the federal land banks.
This is cooperative banking system,
and machinery must be provided for the
government of the banks. Each of the
local loan associations has a vote in the
election of the directors in one of the
federal land banks. The loan commit
tee, provided by the local association, is
the agency for the valuation of the lands
The board of directors of the local asso-
citation admits or rejects new memb bers
according to their wishes But most i'm
portant of all, since this system is CO.
operative, the borrowe rs must provide
the money for the increasing capital oi
the bank-and they do this by investing
in the local associations.
Loans under this system may not ex-
ceed 80 per cent of the appraised value
of the land used as security, and twenty
per cent of the appraised value Of tht
permanent, insured improvements there.
on.
No land owners may become members
Of an association by indicating in their
application what land they expect t
come into possession of and sgains
Z which the mortgage will be placed.