The herald., 1917-03-15
FARM LOAN ACT.
u. How the Farmers May Take
Advantage Of 1t.
(By Frank r. Wilson, federal loan bu-
reau. WashinRtnn u CT

S~~.s>~~~~s~~~~->~
N6y frank r. Wilson. federal loan bu-
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
act. 1t takes ten or more TO make
up one Of these associations. If a
farmer wishps 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 member
ship. If no association has been
Termed, 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
or 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 10 use as security.
This association elects five or more
directors, and these directors then
elect president, a vice president, u
secretary-treaSurer and a 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 filled out and filed with the
federal land bank, along with the ar
ticles of association.
Lands Of Members Valued.
These documents should be accom-
panied by q written, unanimous report
OF the loan committee placing 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 o. 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 $4,000 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 a certificate
Of stock for $50. Or he may make his
loan $1,000 and thus have q net loan
Of $1,000, taking as long a time to
repay the So invested in stock as on
the thousand borrowed. This invest
ment Is for the purpose of providing
the increasing capital Of Ire federal
land bank, and the local association
invests 1t 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 cooperative banking sys-
TEN, and machinery must be provid-
ed for the government of the banks.
Each Of the local loan associations has
q 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 d.
rectors of the local association admits
or rejects new members, according TO
their wishes. But most important of
all, since this system is cooperative,
the borrowers must provide the money
for the increasing capital of the bank
and they do this by investing in the
local associations.
Loans made under this system may
not exceed so per cent of the ap-
praised value Of the land used as Sc
curity, and 20 per cent of the up
praised value of the permanent, in
sured improvements thereon.
Non-land owners may become men,
bers of an association by indicating
In their application what land they
expect to come into possession of and
against which the mortgage will be
placed.