The weekly tribune and the Cape County herald. (Cape Girardeau, Mo.) 1914-1918, 1917-02-03
LOAN ACT Will
help The FARMER
Money is Easy to Obtain For
Improving Farm or Buy.
ing Stock.

last summer, it will be easier in II
future for farmer TO secure none
TO make needed improvements or fc
the purchase of live stock, and it wi
be easier also for the landless man (
purchase a farm, according to a re
cent publication Of the Department O
Agriculture Farmers Bulletin 1902
entitled "How the Federal Farm Loa,
Act Benefits the Farmer"
| The Federal land banks establishe,
under this act will stand ready 1t al
times, It is expected, to lend money t.
farmers on farm-mortgage security
The interest charges will be not more
than 6 per cent, nor more than l ne,
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 So per
cent or less. There will be no COM
missions or bonuses. The loans will
De made for periods of time ranging
from D to 10 years, thus doing away
with the trouble and expense of fire.
quent renewals.
The payment of certain part Of the
principal annually or semi-annually,
with the interest, will be required. The
tota! payment, including the 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 AZ ) per cent,
in 20 years, is sSo.24.
After a loan has run five years the
borrower will be permitted to pay of
the whole amount, if he desires, on any
interest date, or to make partial pay
ments in addition to the regular in
stailment.
The requirement Of installment pay
mentS or 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 the loans at a lower
rate of interest, since the gradual re-
duction of the principal constantly i'm
proves the security for the unpaid bal
ance. The privilege OF optional pay
mentS after the first five years leaves
the borrower free to discharge his in
before the end CT the loan
period, if he finds it convenient to
do so.
The Federal land banks will perform
three important services. o. They
will convert the security which farm
afford into a negotiable
form, known as farm-loan bonds. (2) |
They will furnish additional security |
for the protection of these bonds,
through their capital and surplus, and |
thus make the bonds more attractive
to investors. go They will sell the |
Iand-bank bonds in open investment
market, which, for obvious reasons,
the small farmer could not reach to
advantage.
The bonds are to be issued in de-
nominations ranging from $50 to
$1,000, and it is expected that the
ponds Of small denomination will en-
courage saving through their appeal
70 individuals who have not been in
he habit of making investments. The
ponds will be secured not only by farm
deposited in trust with
government official (the registrar for
he land-bank district) but also, as in
Heated above. by the capital and sur
,lus Of the II land banks. /
Both mortgages and bonds will be
exempt from all forms of taxation.
Farmers who wish to obtain money
rom the Federal land banks will or
linarily be obliged to form local loan
and to get their loans
through these organizations. The To-
al loan associations will improve tie !
redit of their members and reduce the
ost of their loans through the per-
ormance of certain definite services,
lnong which are the following: The
ommittee called the "loan committee"
# the association will appraisc the
offered as security and ap-
'rovc all applications for loans which I
re sent to the land bank. The secre-
of the association will |
transmit the papers and carry on all I
with the land bank rel |
tive to the loans. The association {
yill guarantee the mortgages OF its t
the liability OF any indi-
idual member being limited, however, J
0 an additional sum equal to the {
mount of his capital stock, or aproxi-
nately to per cent of his own loan. n
One important function Of the new
ystem will be to establish safe stan I