Jackson County sentinel. (Gainesboro, Tenn.) 1914-current, 1917-07-05
II Helps Those Who Help Them
selves and Who Keep Up
Their Farms
DO YOU KEEP'FARM RECORDS?
Farm Records Tell What Kind OF Busl
ness You Are Doing, What the Earn
Ing Power Of Your Farm ls--ThIs
Assures Better Borrowing Credit.

(By c, E, Alfred. Division of Extension,
University of Tennessee, Knoxville)
The Federal Farm Loan Act passed
by the 64th Congress, contains one pro.
vision that is especially interesting
from the viewpoint of the new business
principle 1t is introducing to the
financing of farms. In Section IL, Ar
ticle 8, of this act 1t is expressly stated
that in making said appraisal, the
value Of the land for agricultural pur.
poses shall be the basis or appraisal,
and the earning power of said land
shall be principal factor"
Heretofore, mortgage security has
been principally upon the sale value OF
the land. With fifty per cent margin
on the value of the land and intelligent
appraisers, this has been safe business
for the lender, Appraisal in this case
consists mainly in a comparison Of the
land under consideration with other
nearby land OF known value in topog.
raphy, distance from the market, soil
and other factors likely to affect its
sale value Under such system, the
earning power of the land Is consid.
cred only to the extent that such fac.
tors as those named are limiting fac
tors In the earning power of the farm.
Suoh basis of mortgage security ia
likely to exist as long as the demand
OF borrowers for lenders is much
larger than the demand OF lenders for
borrowers With the coming OF com.
petition In the farm loan business.
more and more attention IL likely TO
be given to the earning power of indi-
vidual farms. and to individual systsms
Of management.
The new Federal Farm Loan Act In
the section quoted contemplates follow
Ing this latter method In appraising
land.
Under this system OF appraisal REQ.
ognition 10 given to the fact that the
same farm may be worth more under
one farmer and one system of manage,
ment than under q different farmer
and different system of management.
In other words, of two farms that are
now being valued the same, the one
with the best income can secure the
larger loan under the new method Of
appraisal. Loans made on such ap.
praisals are based on the ability of the
borrower to meet his obligations with.
out foreclosure, rather than on his
probable solvency in case Of forselo.
sure.
This will be good business for both
borrower and lender, az It will curb
the careless borrower, put more capi.
tai in the hands OF the best users, and
protect the lender ass'nst security
that is not very liquid.
One good feature Of this proposed
practice 10 the incentive It win give %
good business practice among farmers.
The farmer that makes the most 10 10
hs worth the most.
To know what the real earning DOW.
o. Of the farm is, farmers must keep
accounts. and keeping accounts Will
point out many ways to increase the
earning power Of the farm.
Good accounting is the key to sue
sAssful business Management. For say
Information on Bookkeeping, or for .
simple method Of keeping farm 40
counts. all the following coupon and
send It in. The service Of the Division
Of Extension is free to residents e
Tennessee.