The Barre daily times. (Barre, Vt.) 1897-1959, 1917-01-16
AS First Step Toward Bor-
rowing Money of Fed
eral Farm Banks
TEN OR MORE MUST
JOIN AN ASSOCIATION
No One Farmer May Borrow
More Than $4,000 Nor
Less Than $500

"How the Farmers May Take Advan'
tage of the Farm Loan Act" Is the sub
ject of the second article prepared by
Frank r. Wilson of tho federal loan BIZ.
reau on the general subject of farm loans
Mr.. Wilson says:
Only farmers or prospective farmers
who wish to borrow money may join the
national farm loan associations provided
under the federal farm loan act. 1t takes
10 or more to make up one of these as
socations. II farmer wishes to borrow
he should find out ii such an association
has been formed in his community. If 1t
has, he should make application to the
secretary-treasurer for membership. II
no association has been formed, he should
attempt to get 10 or more farmers who
wish to borrow, to meet for the purpose
of organizing.
The process of organization is very
simple One of tho members should
write TO the federal farm loan board,
Washington, d. c., for blank articles of
association. When they have been re-
ceiyed a meeting of the prospective Dor
rowers should be called and these articles
of association should be adopted, signed
and acknowledged by each member. Each
member will indicate the amount he
wishes to borrow and the value and de-
scription of the land he wishes to use as
security.
This association elects five or more d.
rectors and these directors then elect a
president, vice president, secretary
treasurer and loan committee of three
members.
This is as far as the association can go
until after the federal land bank Of that
district is established. Then, upon APP
plication, the federal land bank win fur
nish the local association with blank
application for charter, which should be
filed out and filed with the federal land
bank, along with the articles OF associa-
tion.
These documents should be accompan-
led by written, unanimous report OF
the loan committee placing a valuation
on the lands of each of the members.
Then the appraiser of the federal land
bank viii come to inspect the lands OF
the members and O. X. or reject the val
uation prepared by the loan committee.
No one farmer may borrow more than
$4,000 nor less than 800. No national
farm loan association may start with
less than $4,000 of loans.
Each member joining the local associa-
ton must buy stock in the association
equal to 5 per cent of the amount he
borrows. If he borrows $1,000 he will
get $3.50 in cash and certificate OF stock
for $50. Or he may make his loan 81 $50
and thus have net loan of $1,000. TAX
ing as long time to repay the $50 in.
vested i'm stock as ON the thousand Dor
rowed This investment is for the pur-
pose of providing the increasing capital
Of the federal land bank, and the local
association invests 1t in the land bank
stock. The borrower will get his money
back when he pays off his mortgage, and
will get what dividends it earns while 1t
is invested.
Now, what is the object of requiring
the borrowers TO thus group themselves
into loan associations?
Primarily that the loan associations
may eventually own the federal land .
banks.
This is a cooperative banking system
lnd machinery must be provided for the
government of the banks. Each of the
oeal loan associations has vote in the
election of the directors in one of the fed
,ral land banks. The loan committee
provided by the local association is the
agency for the valuation of the lands.
The board of directors of the local asso-
.iation admits or rejects new members,
according to their wishes. But most i'm !
,ortant of ALL since this system is CO. (
operative, the borrowers must porvide
he money for the increasing capital OF
he bank-and they do this by investing
n the local associations.
Loans made under this system may |
lot exceed 80 per cent of the appraised |
'alue of the land used as security, and
% per cent of the appraised value of the
permanent, insured improvements there
n.
Non-land owners may become members
4 an association by indicating in their
pplication what land they exp"rt to
ONE into possession of and against
which the mortgage will be placed.
Editors note. To-morrow's installment
viii have II do with the subject of amor II