Perth Amboy evening news., 1917-01-16
HOW FARM LOAN BANK
WILL CONDUCT BUSINESS
by FRANK r. WILSON.
OF the Federal Farm Loan Bureau.
written for the United Press.)

written for the United Press.)
| Washington, Jan. 16.-The right to
borrow under the Farm Loan act is
omitted to farmers and prospective
farmers.
| Farmers or prospective farmers who
{ wish to borrow group themselves into
Farm Loan Asso Citations, each associa-
| ton being composed of ten or more
farmers. and each association starting
with a minimum of at least $4,000 of
loans. To join, a farmer merely makes
duplication to the secretary-treaSurer
of the loan asso citation in his commun-
ity. If none has been organized he
should get together the required num-
Der of borrowers and organize an asso-
citation.
The Federal Farm Loan Board at
Washington will furnish on applica-
|tion, a blank form of articles of as
sociation for such organizations. Then
the organizers meet and adopt these
articles and sign them and the secre-
tary-treasurer makes affidavit thereto.
This association then elects five di-
rectors and the directors then elect a
president, Vice-president, secretary
treasurer, and a loan committee Of
three members.
AS soon as the Federal Land Bank
of that district is ready for business 1T
will provide this local association with
additional blanks including an applica-
ton for a charter and blanks for the
loan committee to use in the work of
appraising the farms.
AS soon as the loan committee is
elected it may proceed to appraise the
farms upon which mortgage are to be
placed. Its report, which must De
unanimous, must accompany the sign
ed articles of association, and be filed
with the Federal Land Bank Of that
district.
When this is done the appraiser of
the Federal Land Bank will come to
inspect the security offered and ac-
cept or reject the report of the loan
committee.
No one farmer may borrow more
than $4,000 nor less than 800. No
National Farm Loan association may
start with aggregate loans less than
100000.
If John Smith, q farmer, desires to
borrow $4,000 he invests in the stock
of his local loan association one-twen-
tieth of this amount, 500.
His association then invests this
money in the stock of the Federal
Land Bank, enabling 1t thus to in
crease it's capital so as to make an
other 50, 900 to some other farmer. The
borrower gets his investment back
when he pays off the loan, or he may
turn 1t in as the last payment on his
loan.
Farmers are required to form these
organizations so that they eventually
will control the federal land banks.
Each loan asso citation votes in the
election of the directors of its federal
land bank. Each association has
loan committee which values the land
of its members subject to the approv-
al of the land bank appraiser and the
federal land bank. Each association
has a board of directors which has the
power to exclude or admit new men,
bers by a two-third's vote. 1t Is
through 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 possession
of his own banking system.
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
Intends to Immediately begin farming.
will be devoted to this