The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1917-03-30
FLAT CHARGE WAS FIXED BY
The FEDERAL BOARD
E. G. Quamme, President of the St.
Paul Farm Bank, Makes Statement
Relative to New Institution Which,
Has Been Backed BY the Unite.
States Government, Would Increase
The Individual Il Negotiation to
$4,000
From Fridays Daily.

| lSpeclal TO Free PreSS.J
st. Paul, Minnesota, March BE.
G. Ouamme, president of the st. Paul
federal land bank, has returned from
Washington where he attended a
conference of the directors of the
twelve federal land banks, with Sec
rotary OF the Treasury McAdoo and
the members of the federal farm loan
board. He expressed qualification over
| the fact that this conference has
! liked a fiat interest rate of five per
| cent, applying to all parts of the
United States. He declared that this
interest rate would prove a great
boon to the farmers of the middle
west and predicted that within a
year the ST. Paul federal land bank
| will have made loans aggregating
$1O,OOO,0OO.
Mr.. Quamme also announced chat
the conference of bank presidents
passed resolution requesting con-
gress to increase the limit of the
! loans permitted to an individual bor-
rover from $4,000 to $4,000. He ex-
pressed the hope that the special ses
sion or Congress, soon to convene
would make this change for the spe
cial benefit of the ST. Paul bank dis. ,
| trict, where the average size O |
farm loans is larger than in an
other section of the United States.
! Approve Farm Loan Bonds.
| In order that more funds may be
available for Investment in farm loan
bonds, and in turn made available ito
LEND to farmers of this district, Mr..
Quamme urged that the legislatures
of North Dakota, Minnesota, Wiscon-
sin and Michigan Immediately pass
laws making farm loan bonds ap-
proved Investments for trust funds,
insurance companies and savings
| banks.
| Mr.. Quamme announced that the
/ bonds issued by the twelve federal
land banks would be placed on the
market at Az 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 500, 000,O
! of these bonds will be issued during
! the coming year and is making ar
+, engagements which will assure a
ready market for them All of this
money will be made available to the
] farmers of the United States at five
per cent
/ Must Organize Into Groups.
! To borrow from these federal land
banks. farmers are required to organ
| ize themselves into groups contain
| ing at least ten farmer borrowers and
each group asking for at least $780,
| 0O0 Of loans. The ST. Paul federal
land bank is now prepared to furnish
a blank form of articles of associ
| ton to make the organization of thes
groups simple and easy. Other nee
essary blanks will also be furnished
on application
Farmers are permitted to borrow
up to so per cent of the appraised
value of the land, plus 20 per cent of
| the value of the permanent insured
improvements. Loans are to be made
| at five per cent and must be retired
on the amortization plan, which
means repayment by fixed annual
payments throughout the period of
the loan. The loans may run from
/ five to forty years at the option of
the borrower. The object of these
long time loans is to enable the
farmer to meet these small annual
payments out of the increased earn
ings of the land, made possible by the
investment of the borrowed money.
1t Is Purely Cooperative.
| This new banking system is pure
| ly cooperative. 1t is for the sole use
OF farmers and prospective farmers
Farmers will eventually own all of
the stock of the federal land banks
and they will elect officers of these
banks. There is no opportunity for
individual profit in the entire system.
The preliminary organization Of
| national farm loan associations has
progressed to a degree far beyond
the expectations of the federal farm
loan board at Washington and every
thing points to the unqualified sue
cess of this new enternrise