The Oakley herald. [volume] (Oakley, Idaho) 1908-1961, 1917-03-30
by Frank II. Wilson, federal loan
reau. washington. u. CT

a.
reau. Washington, D. c.
Only farmers or prospective farmers
who wish to borrow money may join
the national farm loan associations
provided under the federal farm loan
net. 1t takes ten or more to make
up one of these associations. If a
farmer wishes to borrow he should
find out IL such an association has
been formed In his community If 1T
has, he should make application to
the secretary-treasurer for member
ship. If no association has been
formed, he should attempt to get ten
or more farmers who wish to borrow,
TO meet for the purpose of organizing.
The process of organization is very
simple. One of the members should
write to the federal farm loan board
Washington, d. c., for blank articles
of association. When they have been
received meeting of the prospective
borrowers should be called and these
articles of association should be adopt
ed, signed, and acknowledged by each
member. Each member will indicate
the amount he wishes to borrow and
the value and description of the land
he wishes to use as security.
This association elects five or more
directors and these directors then
elect n president, vice president,
secretary-treasurer, and loan COM
mittee of three members.
This is as far as the association can
go until after the federal land bank
Of that district is established. Then,
upon application the federal land bank
will furnish the local association with
a blank application for charter, which
should be filed out nd filed with the
federal land bank, along with the ar
ticles of association.
Lands Of Members Valued.
These documents should be accom-
| panied by written, unanimous report
Of the loan committee placing a valua-
ton on the lands of each of the men,
bers.
Then the appraiser of the federal
land bank will come to inspect the
lands of the members and 0. X. or
reject the valuation prepared by the
loan committee
No one farmer may borrow more
than $4,000 nor less than 500. No
national farm loan association may
start with less than 10000 of loans.
Each member joining the local asso-
citation must buy stock In the associa-
ton equal to per cent of the amount
he borrows. If he borrows $1,000 he
will get $3.50 In cash and certificate
of stock for $50. Or he may make his
loan $1,000 and thus have a net loan
of $1,000, taking as long a tins to
repay the $50 invested In stock us on
the thousand borrowed. This invest
ment is for the purpose of providing
the increasing capital of the federal
land bank, and the local association
invests it in the land bank stock. The
borrower will get his money back
when he pays off his mortgages, and
will get what dividends it earns while
1t Is invested.
Why They Are Grouped
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 a cooperative banking sys-
tenn, and machinery must be provid-
ed 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 committee, provided by the local
association, is the agency for the valu-
alton Of the lands. The board of di-
rectc s of the local association admits
or .jects new members, according to
their wishes. But most important OF
I'll. since this system is cooperative
he borrowers must provide the money
ior the increasing capital of the bank
and they do this by investing In the
.Ocal associations.
Loans made under this system may
not exceed so per cent of the ap
praised value Of the land used as Sc
:urity, and 20 per cent of the ap
raised value of the permanent, in
sured improvements thereon.
Non-land owners may become mem
Aers of an association by indicating
their application what land they
xpect to come into possession of ant
gainst which the mortgage will be
laced.