McNairy County independent. (Selmer, McNairy County, Tenn.) 1902-1969, 1917-03-16
FARM LOAN ACT.
v. Its Effect on Farm Tenantry.


(By Frank X. Wilson, federal loan bu-
reau, Washington, ID. Co
Students of American agriculture
have been greatly concerned over the
remarkable increase In farm tenantry
Years ago when land was plentiful
and cheap, tenantry was almost un.
known. The man who wanted to farm
simply went out and purchased cheap
land or settled on government land
Practically all Of the land was farmed
by owners.
When the supply of cheap land be-
came exhausted and most of the land
occupied, there was no longer an out
let for the increasing number of land
less farmers. Consequently, those
who wished to engage in the business
were compelled to dicker with those
who already held title to the lands,
Farm land ownership now represents
billions Of dollars In land values which
constitute positive bar to the getting
of farm homes by landless farmers.
The question is frequently asked, 'Ii
the farm loan act provides cheaper
money for land purchase, will it moi
make it easier for some men to get
credit to monopolize land, increase
land values, make it harder for the
tenant farmer, and perpetuate and
broaden the tenant system?"
Only for Actual Farmers.
The answer is that the privilege OF
borrowing under the farm loan act
is denied the landlord and the spec.
ulator. Furthermore, the size of the
loans is limited to $4,000 to check
the tendency toward too large farms
and land monopoly.
So, it will be seen that the farm
loan act gives to the rich no additional
advantage in buying land, but does
give an added advantage to the land
less. 1t exerts its financial pressure,
and will always do SO, in favor of ac-
tual working-farmer ownership and
against absentee landlordism or the
holding Of lands out of use for specu-
lative purposes.
But 1t has been frequently asked
how a credit system that lends only
up to 80 per cent of the value of the
land enables the tenant to buy farm
IL the tenant has not saved the other
80 per cent.
To this man the avenue for acQuir-
ing the other 80 per cent is the Sec
ond mortgage, given either to the orig
inal owner Of the land or to a private
money-lending agency. Financial men
predict that under the farm loan sys-
TEN the second mortgage will take on
a new value.
Good for Both Parties.
The tenant who wants to buy land
indicates what land he intends to pur-
chase when he joins the farm loan as
ISOLATION. Then when he gets his loan
up to so per cent of the value he pays
that down to the original owner Of the
land. Then he executes second mort
gage to the original owner, this mort
gage to come due, say, in ten years.
The first mortgage under the amOrtiza-
ton plan will be gradually reduced
each year and the required payments
hereunder will be so small as not to
menace the ultimate security of the
second mortgage. This will be an ad-
vantageous arrangement for both
parties.
The original owner will get 30
per cent cash payment for his land,
which is more than he would ordinar-
lily get in real estate transaction.
The tenant will find that, unless he
has paid an unduly high price for his
land. his annual payments to retire
both his first and second mortgages
will not be as great as the rent pre-
viously paid.
In some Of the states second mort
gage banks are already being formed
by private individuals to lend money
to landless people of proper character
who want to buy farms and who have
not saved the 80 per cent as a nest
egg. 1t is believed by financiers that
men with farming ability and integrity
will not have difficulty in getting the
proposition financed. 1t depends al
together on the character Of the bor-
rover.