Warren sheaf. [volume] (Warren, Marshall County, Minn.) 1880-current, 1917-02-28

u law" was signed by the presi-
dent and became law on July
IL. The primary purpose of this act
- to promote agricultural prosper
1ty by enabling farmers to borrow
money on farm mortgage security at a
reasonable rate Of interest and for rel
atdvely long periods Of time To attain
this object two farm mortgage systems
are provided first, system operating
through regional land banks and, sec
ond, system operating through joint
stock land banks
To attract money to the farm loan
field the act provides method where
by those who have money to lend can
find safe investments in the form Of
debentures or bonds Of small and large
denominations issued by the banks and
based on the security of mortgages on
farm lands.
These two systems are to be under
the general supervision of q fedora.
farm loan board in the treasury depart
ment, composed of the secretary of the
treasury as chairman ex officio and fou=
members appointed by the president
This board has authority to appoint APP
praisers, examiners and registrars, who
will be public officials.
The Federal Land Bank System.
Under the federal land bank system
the act provides for federal land banks,
which make loans for the first twelve
months exclusively through local ma
tional farm loan associations composed
of borrowers. These associations shall
be shareholders in the banks, and in that
way members who are borrowers will
share in the profits Of the bank. The
money for the loans is to come partly
from the capital Of the banks and part
ly from the sale by the banks of bonds
secured by first mortgages on farm
lands. The act defines strictly the pur-
poses for and the conditions under
which loans are to be made and re-
quires that the rate of interest charged
On farm loans shall not exceed 6 per
cent per annum
The United States shall be divided
into twelve farm loan districts, and a
federal land bank with subscribed
capital stock of not less than S75O,OO0,
each share So, shall be established in
each district. Each federal land bank
may establish branches in it's district
Within thirty days after the capital
stock is offered for sale it may be pur-
chased at par by any one. Thereafter
the stock remaining unsold shall be
bought by the secretary Of the treas
ury for the United States. 1t is pro-
vided, however, that the government
shall not receive any dividends on its
stock. Ultimately it is intended that
all the stock in the banks shall be
owned by the associations of borrow
ers, and provision therefor is made in
the law for transferring the original
z stock at par to these associations.
National Farm Loan Associations.
The act provides for the creation of
local national farm loan associations,
through which it is contemplated that
the federal land banks shall make their
loans. In the event that local loan
association is not found in any locality
within year, the federal farm loan
board may authorize federal land
4 bank to make loans on farm land
4 through approved agents. Ten or more
persons who own and cultivate farm
land qualified as security for a mort
gage loan under the act or who are
about to own and cultivate such land
may form such an association, provided
the aggregate Of the loans desired by
the membership is not less than $4,000
4 Each member must take stock in his
4 association to an amount equivalent tc
B per cent of the amount he wishes to
q borrow. This stock the association
holds in trust as security for the mem
nber's individual loan. The association
Ill turn. when applying for money from
4 the bank, must subscribe for stock III
I the bank to an amount equivalent to
Sper cent of the sum it wants to obtain
4 FOR its members. This stock is held IL