Mexico weekly ledger. (Mexico, Mo.) 1855-1956, 1917-04-05
v. v. FRY EXPLAINS THE
FEDERAL LAND BANK PLAN
Mexico Attorney, Now Registrar Of
Federal Land Bank, Tells How
Money May be Secured
MUST FORM ASSOCIATIONS
Proposed Association Must Begin
With Ten Farmers Whose Ag-
gregate Loans Total $4,000
To the Ledger:

ty have asked me to give them infor-
nation as to how money may be bor-
rowed from the Federal Land Bank Of
st. Louis.
Ten persons who own land, or who
are about to become owners of land,
all of whom must be borrowers, form
a National Farm Loan Association.
The stock of this association must be
at least $4,000, divided into two
thousand shares at the par value Of
$5 per share. This capital stock is
represented by the amount of loans
applied for and can be increased as
the membership increases.
These ten members must apply for
loans aggregating $4,000 and may
exceed that amount to such amount as
the loans applied for may reach. Each
party who applies for a loan must
take stock in this National Farm
Loan Association to the amount Of
five per cent of the loan he applies
for, at $5 per share. If he applies
for loan of $1,000, he takes $50 in
stock in the National Farm Loan As
sociation of which he is a member.
This Association may be called
"The Mexico National Farm Loan As
sociation," which begins with ten
farmers whose aggregate loans
amount to at least $4,000; elect out
of its membership by majority vote
a board of directors consisting Of five
to nine members, and out of the direc-
tors, president, vice-president, and
a loan committee of three. They al
so elect a secretary treasurer who
need not be borrower or a member
of the association.
Each member of the association
signs an agreement as to how much
money he desires to borrow and agrees
to take five per cent of his loan in
stock in this National Farm Loan
Association, and these loan associa-
tions take stock in the Federal Land
Bank of st. Louis equal to five per
cent of the loans it's members apply
for. This stock is taken to and in the
name of the Mexico National Farm
Loan Association and this bank stock
is deposited with the bank as secu-
rity for the loan. When the loan is
paid off the stock is paid and re-
deemed. The holder of the stock
gets any dividends paid on it.
Every loan made through the
Mexico National Farm Loan Associa-
ton is indorsed and guaranteed by
that association. No member or
shareholder in the Mexico National
Farm Loan Association is liable for
any loan except his own. No bor-
rover is liable for other loans than his
own. The only expense the borrow
er is put to is the cost of his abstract.
There is no commission. Your loan
committee of three views the land
of each borrower and approves or
disapproves of the loan. The bank
sends an appraiser and he reports
on the loan. The Federal Bank of
St. Louis grants a loan of one half
of the value of the farm. This money
can be borrowed from five to forty
years at five per cent interest and
one per cent of the principal paid
each year, making an annual pay
ment of six per cent each year, paya-
BILE annually or semi-annually as the
borrower prefers.
Farmers are advised to borrow for
thirty-six years and if the borrower
will pay six per cent on his loan an
nually that will pay his loan off in
full at the end of thirty-six years.
Any borrower is given the right after
five years to pay $25 or any multiple
of $25 or all of his loan on any inter-
est pay day.
The farmer in borrowing this mon
ey must use it to pay for his land
or paying off a deed of trust now or
it, or in erecting buildings and i'm
provements on the land, or to buy
farming implements or live stock fol
the farm, or improving the land.
A farmer is one who owns and ope
rates the farm himself or under his
supervision but he need not live OF
the farm; no other person can borrow
!. The secretary-treasurer is the i'm
portant officer as he receives the
. money from the bank for the farmer
, and he must check it out for the pur
poses for which it is borrowed. HI
must collect the interest each yea
! from the members of his association
and remit the interest to the Fedora
: Land Bank and get receipt for tn
borrower. He must see that eacl
i borrower pays his taxes each year
keeps up his insurance and keeps VI
\ his farm, all Of which he reports Il
, the bank. This secretary-treasure
, must keep a hook account with eacl
y borrower and he is put under bond
: The association selects its own sec
y retary-treasurer and fixes his sala
: ry. 1t is advisable to select some EN-
y ployee in local bank or some on
: with business experience. You cal
, form as many associations in TIL
: county as you like. If there are
y number of these associations it ]
7 advisable to select man at the coun
> ty seat of the county who can ac
! for all the associations of the county
y If parties in and around Mexic
7 who desire to form a National Farm
> Loan Association will write me Civ
: ing me their names and the amount o
y loan wanted I will meet them in Mey