Daily capital journal. (Salem, Oregon) 1903-1919, 1917-03-30
Farm Loan Interest
Fixel at 5 Per Cent
by Federal Land Banks

Spokane, Wash, Mar. 80. = D. G.
O'Shea, president of the Spokane Fed
eral Land bank, has returned from
Washington where he attended confer
enee of the presidents of the IL Federal
Land banks, with Secretary of the
Treasury McAdoo, and the members of
the Federal Farm Loan board.
He expressed qualification over the
fact that this conference had fixed a
flat interest rate of five per cent, apply
ing to all parts of the United States.
He declared that this interest rate
would prove a great boon to the farmers
of the northwestern states and predicted
that within a year the Spokane Federal
Land bank will have made loans aggre-
eating $10,000,000
Mr.. O'Shea also announced that the
conference Of bank presidents passed
resolution requesting congress to in
crease the limit of the loans permitted
to an individual borrower from $4,000
to $4,000. He expressed the hope that
the special session of congress, soon to
convene, would make this change for
the large boToweds of the Spokane
bank district
In order that more funds may be
available for investment in farm loan
bonds, and in turn made available to
lend to farmers of this district, Mr..
0 Shea urged that the legislatures of
Washington, Montana, Oregon and
Idaho Immediately pass laws making
| farm loan bonds approved investments
for trust funds, insurance companies
and savings banks.
Mr.. o Shea announced that the bonds
issued by the 12 Federal Land banks
would be placed on the market at IL
per cent, but would probably be sold at
a premium. He expressed qualification
| over the fact that the Federal Farm
Loan board has anticipated that at least
800, 100000 of these bonds will be is
sued during the coming year and is
making arrangements which will assure
n ready market for them. All of this
money will be made available to the
farmers of the United States at five PEI
cent.
To borrow from these Federal Lane
banks farmers are required to organiz'
themselves into groups containing a
least 10 farmer-borrowers and eael
group asking for at least $4,000 O
loans. The Spokane Federal Land banl
is now prepared to furnish blank Torn
of articles of association to make Tn
organization of these groups simple an
easy. Other necessary blanks Will ais
be furnished on application.
Farmers are permitted to borrow u
to so per cent Of the appraised value, o
the land, plus 20 per cent OF the vain
of the permanent insured improvements
Loans are to be made at five per cen
and must be retired on the amortizatlo
plan. which means repayment by tlXe
annual payments throughout the perio
of the loan. The loans may run frol
five TO 40 years at the option Of tn
borrower. The object Of these ian
time loans is to enable the farmer
meet these snail annual payments or
: of the increased earnings of the lanC
made possible by the investment of n
borrowed money.
. This new banking system is purely G.
! operative II is for the sole use of farm
ers and prospective. farmers. Farme
win eventually own all Of the stock
: the Federal Land banks and they WI
4 elect the officers of these banks. The
is no opportunity for individual prof
J in the entire system.
The preliminary organization OF y
tional Farm loan associations has pr