The Johnson City comet. (Johnson City, Tenn.) 1916-1917, 1917-01-18
HOW FARMERS MAY TAKE
ADVANTAGE OF LOAN ACT
Drank r. Wilson, in Bristol Herald
COmier.D

Only farmers or prospective farm
ers who want to borrow money may
ioin the national farm loan associa-
ton provided under the Federal
Farm Loan Act. 1t takes len or more
to make up one of these associations
If farmer wishes to borrow he
should find out if such an association
has been formed in his community. II
it has he should make application to
the secretary-treasurer for member
ship. If no association has been furln-
ed, he should attempt to get ter or
more farmers who wish to borrow, to
meet for the purpose of urganigiLg.
The process of organization is very
simple. One of the members should
write to the Federal Farm Lean
Board, Washington, d. c. for blank
articles of association. Whoa th.y
have been received a mectine OF the
prospective borrowers shOlld be call
ed and these articles of association
Should be adopted, signed, and a..
knowledged by each member Each
member will indicate the amount he
wishes to borrow and the Ia.ue and
description Of the land he wi, to
use as security.
This association elects five or
more directors, and these directors
then elect a president, a vice presi-
| dent, secretary treasrer, and loan
| committee of three members.
This is as far as the association
can go ntil after the Federal land
bank of that district is established,
Then, pom application the Federal
land bank will furnish the local as
sociation with blank application for
charter, which should be filled ont
and fled with the Federal land bank
along with the articles of assoscia-
ton.
These documents should be ac-
companied by a written, unanimous
report of the loan committee placing
valuation on the lands of each of
the members.
The the appraiser of the Federal
land bank will come to inspect the
lands of the members and o. X. or
reject the valation prepared by the
loan committee.
NO one farmer may borrow more
than 10000 nor les sthan $1o0. No
national farm loan association NAV
start with less than 100000 of
loans.
Each member joining the local as
sociation must buy stock in the asso-
clation equal to per cent of the
amount he borrows If he borrows
$1,000 he will lget $3.50 in cash and a
certificate of stock for $50. Or he
may make his loan $1,O5O and thus
nave a net loan of 81 900, taking as
long a time to repay the $50 invest
ed in stock as on the thousand hor-
rowed. This investment is for the
purpose of providing the increasing
capital of the Federal land bank. and
the local association invests it in the
iand bank stock. The borrower will
get his money when he pays off his
mortgage, and will get what dividends
1t earns while it is invested,
Now, what is the object of rcquir-
ing 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
system, and machinery must be pro-
vided for the government of the
banks. Each of the local loan asso-
Citations has vote in the election of
tn edirectors in one of the Federal
land banks. The loan committee pro-
vided by the local association, is the
agency for the valation of the lands.
The Board of directors 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 in
creasing capital of the bank-and
they do this by investing in the local
| associations.
Loans made under this system NAV
not exceed so per cent of the ap-
praised value of the land used as Sc
curity, and 90 per cent of the ap-
praised value of the permanent in
sured improvements thereon.
Non-land owners may become MEM
bers of an association by indicating
in their application what land they
expect to come nto possession of and
against which the mortgage will be-
placed.