The Union times. [volume] (Union, S.C.) 1894-1918, 1917-01-26
INFORMATION REGARDING
FEDERAL LAND RANKS
Hon. Sam J. Nichols Tells Farmers
How to Form Loan Associations
and How to Get Loans From
Land Banks.

Washington, Jan. 19.-The farmer,
OF my District being very much inter
ested in how to form loan associations
l am herewith giving you information
as to how to get loans from the lant
banks under the Federal Loan Act.
The right to borrow under the Farm
Loan Act is limited to farmers ant
prospective farmers. Farmers ant
prospective farmers who wish to Dor.
row, group themselves into farm
loan associations, each association
starting with minimum of at least
$4,000 Of loans, and each association
being composed of ten or more farm.
ers. To join, farmer makes appli-
cation to the secretary-treasurer OF
the loan association 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-
ton blank form of articles of asso-
citation for such organizations. Then
the organizers meet and adopt these
articles and sign them, and the secre-
tary-treasurer makes affidavit thereto.
The association then elects five or
more directors and the directors then
elect president, vice-president, Sec
retary-treasurer, and a loan commit
tee of three members. AS soon as the
Federal land bank of that district is
ready for business, it will provide this
local association with additional
blanks, including an application for
charter and blanks for the loan COM
mittee to use in the work of apprais-
ing the farm,
As soon as the land committee is
elected it may proceed to appraise the
farms upon which mortgages are to be
placed. Its report, which must be
unanimous, must accompany the
signed 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 Of
fered and accept or reject the report
of the loan committee. 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. If John Smith,
a farmer, desires to borrow $4,000
he invests in the stock of his local
loan association, one-twentieth of his
amount or $1O0.
His association then invests this
sv fhn cfo 1f ho Eala~ol
Land Bank, enabling it thus to in
crease its capital so as to make an
other loan of $4,000 to some other
farmer. The borrower gets his invest
ment back when he pays off his loan.
or he may turn it in as the last psya'
ment on his loan. Farmers are re-
quired to form these organizations so
that they will eventually control the
Federal Land Banks. Each loan asso-
citation votes in the election of the d.
rectors of its Federal Land Bank, and
which values the land of it's members
subject to the approval 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 members by
two-thirdS vote. 1t is through this
local loan association that the farmer
invests the money to be used for in
creasing the capital stock of the Fed
eral Land Banks, and this is now the
farmer comes into possession of his
own banking system.
Farmers are permitted to borrow
up to 30 per cent of the appraised
value of their land and 20 per cent of
the permanent insured Improvements
thereon.
1t is not necessary for a borrower
to be an actual land owner when he
joins, but the landless man must ISe
the borrowed money to purchase land
which he intends to Immediately begin
farming.
l believe that the first bond issue
under the law will be at 12 per cent.
That Will get the money to the farmer
at 6 per cent. hope later on that the
bill will be amended so as to even
lessen this rate of interest.
There is no question that this is one
of the greatest pieces of legislation
that has ever been enacted by con
gress for the benefit of the farmers S.
and certainly hope that great many
of my constituents will take advantage
of the provisions Of The law.
Hoping that the information con-
tanned in this letter will be of service
to you, and assuring you that it will
give me pleasure to answer any other
questions which you make relative to
this matter, am, with kindest per
sonal regards,
Sincerely your friend,
Sam j. Nichols