The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1917-02-15
WHEAT RANCHERS TO
GET FEDERAL LOANS
Horse Heaven Farmers Organize
Loan Association with Mem
bership of Eighteen

school house last week the Horse Hea-
ven wheat ranchers organized farm
loan association for the purpose Of
borrowing money thru the method
provided by the federal farm loan
act. The organization was directed
by County Agriculturalist Lee M.
Lampson.
Eighteen farmers have made appli-
cation for loans thru the association
and it is probable that two or three
more will be added to the list. Di-
rectors elected are C. C. Williams,
Victor Heberlein, Otis Long, John
Wroe and Alfred Anon.
At later meeting the directors met
and organized by electing Williams
president, Heberlein vice president and
Long, Wroe and Anon the loan COM
mittee. The secretary-treasurer has
not yet been chosen.
The farmers of Benton county have
been very active in taking advantage
of the new federal law and there are
now several associations in the county.
,Altho no money has yet become
available it is expected that the fed
eral loan banks will stand ready at all
times to lend money to farmers on
farm mortgage security. N
The interest charges will not be
more than per cent, nor more than
per cent above the rate paid on the
bonds sold by the banks. If Az per
cent bonds should be issued, therefore,
the rate charged on loans would be
5k per cent or less. There will be no
commissions or bonuses. The loans
will be made for periods of time rang
ing from 5 to 40 years, thus doing
away with the trouble and expense of
frequent renewals.
The payment of a certain part of
the principal annually or semi-annual-
ly, with the interest, will be required.
The total payment, including interest,
will be the same for each year, and
will be just large enough so that the
entire principal will be paid off at the
end of the period. The annual pay
ment thus required to pay off loan of
$1,000, with interest at 5 per cent, in
20 years, is $80.24.
After loan has run years the
borrower will be permitted to pay off
the whole amount if he desires, on
any interest date, or to make partial
payments in addition to the regular
installment. !.
The requirement of installment
payments on the amortization plan,
as outlined above, will serve, first, to
cultivate habits of thrift in the bor-
rover, and second, to make possible
the placing of loans at lower rate
of interest, since the graudal reduction
of the principal constantly improves
the security for the unpaid balance.
The privilege of optional payments
after the first 5 years leaves the bor-
rover free to discharge his indebted
ness before the end of the loan period,
if he finds it convenient to do so.
The Federal land banks will per-
form three important services. (D
They will convert the security which
farm mortgages afford into a negoti-
able form, known as farm-loan bonds.
(2) They will furnish additional Sc
curity for the protection of these bonds
thru their capital and surplus, and
thus make the bonds more attractive
to investors. (3) They will sell the
land-bank bonds in the open invest
ment market, which, for obvious rea-
sons, the smaller farmer could not
reach to advantage. ....,