The Green Forest tribune., 1917-05-18
THE FEDERAL LAND
 BANK OF ST. LOUIS
To Members of National Farm Loan
 Association Arkansas

St. Louis, May g, 1917
 My dear MT. Rice:
 Your letter just received, and as the questions you ask are those that natur- ally come to the mind of members of a National Farm Loan Association or the individual farmer who hopes to be- come a member of such an Association, and thus be eligible to borrow on his farm lands from this Land. Bank in this District, l am going into some detail so as to answer your questions fully.
 FIRST-I want to call attention to l the fact that this Land Bank was only 1 chartered and organized to get ready for business on March 1, last. We have therefore, had these past two months March and April-in which to get quarters, work out of many forms i for the National Farm Loan AsSocia- | tions and the necessary book forms for
 the Bank, and have these forms print | ed, after being finally approved by the
 Farm Loan Board, and ready for use. l Sixty days is small time in which to do l as much work as has been done by this Bank in this direction. Now farmers who are members of of National Loan l Associations that were organized last
 Fall, must naturally feel some disap- pointment in the fact that their Land i Bank has not begun operations and is not now actually lending the money to | them-unless they stop to think and l consider the facts as outlined in the ! paragraph above.
 i SECOND-The next step necessary i for this Land Bank, and the most essential one of all, was to determine permanent and rapid outlet. for when you understand that five Ap- praisers working in Illinois, Missouri and Arkansos, would be able to absorb this Bank s entire capital in loans in sixty days work, you will readily see l that we must have market for Bonds issued against these mortgage loans, so that we can immediately convert the
 Bonds into money and continue making loans.
 This immediately convertiblity of our Bonds is the point that has been occupying the Members of The Joint Committee on the Currency of the Sen ate and the House of Representative and the entire Federal Farm Loan Board at Washington. We are advised that this question win result in a con tract that is soon. to be closed, for the purchase of one-half of all the Boats issued by all the Twelve Land Banks for the next six months, at par, leaving the Land Banks only half of the Bonds thas they may issue to sell to the public.
 This Land Bank is now receiving subscriptions to it's Farm Loan Bonds from the public, and, from the number of subscriptions that are coming in voluntarily by mail, and in person of the subscribers themselves, 1 can say that there will be no question about the sale of the Bonds of this Land Bank-a of these as fast as we can get them out, if the present demand is any criterion. One single subscription of yesterday was S200, ,000 00-by an Illinois Banker and Capitalist. The Bond subscriptions vary from this amount down to as low as $500.00. You must bear in mind that these Farm Loan Bonds bear 1 1-2 per cent interest, and under the terms of the Farm Loan Act, the mortgages, notes and Farm Loan Bonds issued under the provisions of this Act are deemed and held to be 'instrumentalities of the Government of the United States" and as such, "they and the income derived therefrom, are declared and held to be exempt from Federal, State, Municipal and local taxation; when you consider that the rate of taxation in St. Louis S2. 25 on $100.00, you will begin to under stand why the public, owning local real estate mortgages and other similar in- vestmentS, are anxious to convert their tt,yTa aefT atafc IOf0 Loan Bonds.
 have gone into these first steps in the permanent organization of this Land Bank (which, of course, applies to the entire Federal Land Bank Sys- temp so that you can readily see why some slight delay has been absolutely necessary in the time elapsing between the temporary organization Of the Land Banks and their field work in the mak- ing of loans through perfected Nation al Farm Loan Associations.
 THIRD-The appointment of Land Appraisers has necessarily been delay ed until the Farm Loan Bond question has been settled. for to have made these appointments at an earlier date would have only meant that there were additional men on the pay roll of the Land Bank without any opportunity to perform service in return for their pay. While on this subject of expense, it may not be amiss to state that im- mediately on payment by the Govern ment for the stock of this Land Bank which, under the terms of the Farm Loan Act draws no dividends or other interest, this money was immediately placed with the strong local National Banks of St. Louis on basis that nets this Land Bank something like $1700 % per month, so we have practical ly covered our present expenses in this way.
 FOURTH-Now to answer your ques- tions: AS soon as the bond question is determined, think Appraisers will be appointed; as this Bank is ready for their work in the field; there should then be no delay whatever in the mak- ing of loans by this Land Bank but, do not misunderstood melt will take the necessary time to get to the Associations that are now organized in Arkansas, so that it behooves every man who expects to be d member of National Farm Loan Association to make arrangements to carry himself until he can be reached by us He may | be one of the fortunate ones to receive service in the very beginning and again he may not. He should take care of his needs locally and the members of your Associations should band together for this purpose and concentrate your
 business through some one channel locally that will cooperate with you in this way. This is only ordinary business prudence.
 Farm Loan Associations are intended
 to cover any reasonable area or terri
 tory that the charter members desire, l 4N