Milford chronicle., 1918-02-01
FEDERAL FARM LOAN ACT.

The Federal Farm Loan Act was
finally passed in July, 1916, and since
this time Farm Loan Associations
have been organized in every state in
the union. The Kent County Associa-
tion in Delaware completed its orga-
nization this past FAN and loans have
already been made to its members.
The general purpose of the Farm
Loan Act is to lower and equalize in
terest rates on first mortgage farm
loans; to provide long-term loans
with the privilege of repayment in in
stallments through a long or short
period of years at the borrowers op-
tion after five years; to assemble the
farm credits of the nation to be used
as security in securing money for
farm developments; to stimulate CO.
operative action among farmers; to
provide safe and sound lOng-term in
vestments, or in short, it is designed
TO enable farmers engaged or about
to become engaged, in cultivating
land, to borrow money upon the secu-
rity of their land at low rates of in
terest for a long term of years, with
the privilege Of paying off the prin-
cipal of the loan in large or small
semi-annual installments.
The Federal Land for Delaware is
located in Baltimore and takes in the
territory OF Virginia, Maryland, Della
ware, Pennsylvania, West Virginia.
and the District of Columbia.
In order to borrow money from the
Federal Land banks a farmer must
become a member of a farm loan as
sociation. These farm loan associa- |
tions must consist Of ten or more far |
mers whose aggregate loans amount |
to $4,000 or more. There NAV be /
any number of members greater than 4
ten and their loans may range from |
$4,000 to $4,000 each. In order to .
form farm loan association the pro-
spective borrowers must organize bv
signing articles of agreement and Sc
lecting from their number five per-
sons to form a board of directors.
The board of directors elects a Pres
ldent, Vice President and a Secretary
Treasurer.
Money may be borrowed for the fol-
lowing purposes: to purchase land
Tor agricultural purposes, to purchase
fertilizer, live stock. etc
TO provide buildings and improve
nents to farm land; or to pay off a
tebt of the owner existing at the time
II the organization of the Loan Asso-
'iation in the county in which the
and is located, or to pay off indebted
less subsequently incurred for anv
II the purposes mentioned.
The popularity of the farm loan
iystem of borrowing money arises
rom the fact that in addition to the
'egular interest rate charged bv the
ederal land bank for lending money
o the farmer, it is also necessary for
ne borrower to pay a semi-annual
nstallment upon the principal debt
occurred by the mortgage. This pro-
'ess of paying of the principal debt bv i
nstallments is known as amortiza-
ion. The longer the term of years
or which the loan is made to run the Z
mailer will be the semi-annual paw ,
nent required.
Thus the system of amortization af-
ords a very easy method of paying
Il loan, while at the same time not !
ying up the land for a long period of
ears against the will of the owner
Me long period of the loan also re- I
moves the danger Of the short terms
I the average mortgage with the con r
equent danger of foreclosure. The +
oans may extend over a period of :
ears ranging from five to forty years.
t the option of the borrower ~
This system in full operation should I
aEAish farmers with abundant cap- 4
al Tor carrying on their farming op- !
rations, at low rates Of interest, for +
1ng periods of time without fear of
oreclosure Of their mortgages so long
s honesty and industry characterize
heir euorts. The farmer will use his
apital to make his business more !.
roftable and pay of his loan almost =
Tithout knowing It. The farmers of I
ussex County should form National 3
arm Loan Association through the I
peration OF which the full benefit OF Z
le Farm Loan Act can be realized.
or further information address D. H. ,
auhman, County Agent, Georgetown,
elaware =,