The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1917-01-18
THE FEDERAL FARM LOAN ACT
Twelve Articles-Article 9
NATIONAL FARM LOAN ASSOCI-
ALTON

The most important feature to the
farmer under the new act is the local
farm loan association, for this organ
ization will be owned and controlled
exclusively by the farmers themselves.
A brief description of the machinery
Of the local association and just how
this machinery works will be interest
ing at this time.
In the usual sense of the word, CO.
operation, this act does not provide
for cooperative credit. 1t is land
credit measure pure and simple, based
on first mortgage on land, and the
credit must come through the farmers
local corporation, which is not CO.
operative corporation. The first step
for the farmer is to incorporate. The
chief value of incorporating is to limit
liability. The farmer who joins the
corporation is liable for the debts of
others to a limited extent, namely, ten
per cent of the amount of his loan. The
first machinery of the act then, is the
local corporation known as a National
Farm Loan association. And it is Just
as easy and much cheaper to incorpor-
ate under this federal act than it is,
for instance, to incorporate a farm
ers' elevator under North Dakota
laws. Farmers intending to form To-
cal association will follow these steps:
l. Preliminary Organization.
Ten or more borrowers, all land
owners, or about to be land owners,
hold a meeting, and elect board of
five or more directors of the farm loan
association. The board then chooses
the other officers, namely: president,
vice president, loan committee of three
members, and secretary The
secretary-treasurer need not be a
member. He is the only salaried one
in the organization and should be chos-
en- with great care.
2. Articles of Association.
Articles Of Association must be filled
out BLANKS may be had from the dis
trict land bank) setting forth in gen
eral terms the objects for which asso-
citation is formed, territory in which it
operates, and bearing the signatures
and addresses Of all the incorporators.
3. Application for Charter.
The Articles of Association must be
forwarded to the district land bank,
accompanied by :(a) an affidavit,
(signed by the secretary treasurer and
the members), stating that each sub
scriber is an owner or about to be-
come the owner, of farm land; the
amount of the loan desired by each;
that the total of loans desired is at
least $4,000; (b) report of the loan
committee approving each requested
loan; (c) subscription (not a cash
payment), to stock equal to five per
cent of the loan requested; (d) and a
statement that a temporary organiza-
tion has been formed and secretary
treasurer chosen.
No fee is required to secure the fed
eral charter for the local association.
The minimum fee for incorporating in
North Dakota, on the other hand, is
now $33.
| If the land bank gives it's O. X. to
the application for charter, favor
able report is sent to the Farm Loan
Board at Washington, and charter is
forwarded. Upon the receipt of the
charter, the members Of the local as
ISOLATION are corporation and are
ready to do business. The next step is
pay their subscriptions and get their
loans. Subscriptions may be paid in
cash, or they may be deducted from
he face of the loan by the district land
bank. In such case, a farmer Dor
rowing $1,000 should receive but $3.50
When the borrower pays his loan, his
stock is bought back at par by the as
,lsociation and retired.
j After local associations are once or
ganized, borrower may get in by (a)
making written application to the
secretary-treasurer for a loan, (b)
subscribing for stock equal to five pei
j cent Of the loan (c) and by being voted
| in by two-thirds vote of the direct
ors.
J. The local association is corpora
ton in which each share costs five dol
liars, and carries with it one vote, up