The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1917-01-16
BY FRANK Il. WILSON
OF the Federal Farm loan b"rI"" -

I
written for the Topeka state jour
.nal-)
washington, Jan. 16.-The rlgnt 10
1,er,o1a1 under the farm loan ACT 10 III
tied to farmers and prospective iai III
ers. farmers
who wish to borrow group themselves
-; ~ - ram Loan associations, each as
sociation being composed OF ten VI
MORE farmers, and each assoclatlon
etartjns with a minimum OF at Aea0'
$4,000 of loans. 1.,, m
To ioin. a farmer merely MAKES dp
,,tication TO the ACKNOWLEDGEMENTS OF
the loan association in his conlilluIll my;
~ nome has been organized ne shoulo
get together the required nulll littio "a
borrowers and organize an association
rhe federal farm loan poard at
Washington will furnish, on applca-
ton. a blank form OF articles OF , T1ao7
citation for such organizations. ihel1
the organizers meet ard ao9pl tlese
articles and sign them ana tne sec SEER.
tarv-trea sure. makes affidavit thereto
This association then elects t1Ve or
more directors and the directors then
elect president. Vice-presloeht,
observation-disclosures, and loan COIL
mittee of three members
ADpraisc Lands and Improvements.
As soon as the federal land bank OF
that district is ready for business, IL
,,,il1 nrovide this loan association with
additional blanks, including an appl-
catiol for a charter and blanks Tor the
loan committee to use IN the Worh u
appraising the farms :,
G soon as the loan committee IS
elected il NAV proceed to appraise the
farms upon which mortgages are 10 pc
Dlaced Its report, which must be
unanimous, must accompany lno
signed articles of association ana De
filed with the federal land bank OF
that district.
when this is done the appraiser of
the federal land bank will come to in
spect the security offered and accept
or reject the report of the loan COM
mittee,
No one farmer may borrow more
than $4,000 nor less than 500. NO
National Farm Loan association may
start with aggregate loans less than
$4,000.
Must Buy 500 Stock of Bank.
If John Smith, a farmer, desires to
borrow $4,000, he invests in the stock
of his local loan association one-tWen-
tieth of this amount, or S1OO.
His association then invests this
money in the stock of the Federal
Land bank, enabling it thus to in
crease it's capital so as to make an
other loan of $4,000 to some other
farmer. The borrower gets his in
vestment back when he pays off his
loan, or he may turn it in as the last
Farmers are required to form these
organizations so that they eventually
will control the Federal Land banks.
Each loan association votes in the
election of the directors of its Fed
eraI Land bank. Each association has
a loan committee which values the
land of it's members subject to the ap-
proval of the land bank appraiser and
the Federal Land bank. Each asso-
citation has a board of directors which
has the power to exclude or admit
new members by a two-third!s vote,
1t is thru this local loan association
that the farmer invests the money to
be used for increasing the capital
stock of the Federal Land banks, and
this is how the farmer comes into pos
session of his own banking system.
Borrow Up to 80 Per Cent Value.
Farmers are permitted to borrow up
to 80 per cent of the appraised value
of their land and 20 per cent of the
appraised value of the permanent in
sured improvements thereon
1t is not necessary for a borrower
to be an actual land owner when he
joins, but the landless man must use
the borrowed money to purchase land
which he intends to Immediately be-
gin farming. Another chapter will be
devoted to this feature.
(NOTE - Tomorrow's instaIlment
will explain how loans under the farm
loan act are gradually retired.)