The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1918-01-10
LAKE COUNTY
loan ASSOCIATION
MADISON NATIONAL FARM LOAN
ASSOCIATION FORMED UN-
DER GOVERNMENT
LOAN PLAN.

A movement or great lmpor-
lance to Lake county and contribut-
ing more perhaps to the prosperity
and welfare of the farmer of the
county than any M function of gov
eminent of recent years, was con-
summated on November IL, in this
city, when IA land owners organized
under the provisions of the Federal
Farm Loan association to obtain
loans on their farms, both for farm
improvement and to retire other and
shorter time loans already existing,
C. Il. Olstad, president of the First
National bank, tells us today. There
are organizations of this kind in
other counties in the state, and in
other states they are becoming very
general. But this is the first i'm this
county, or, indeed, in this immedi-
ate vicinity. The first annual meet
ing of the board of directors was
held in the rooms of the First Ma
tional bank Tuesday, and the organ
ization started out on it's first active
business in Lake county.
The Madison organization formed
at that time with IA members, who
are applying for loans. some immedi-
ately, others at dates later in the
year. One loan for more than $4,000
has been passed, and the draft in
the hands of the bank for delivery.
The officers of the Madison associa-
ton are James l.. Sunde, president;
S. G.. Gregory, vice president, and G.
f. Olstad, secretary-treasurer. Five
directors were elected. Martin Heg-
dal, C. j. Johnson. S. G. Gregory,
George Hide and Jas. l.. Sunde are
the local directorate.
There are IL federal oar banks in
the country, in districts correspond
ing to the reserve districts. This
district comprises Iowa, Nebraska,
Wyoming and South Dakota, with
headquarters at Omaha. The gov
eminent appropriated $750,000 to
capitalize the work, against which
bonds will be issued to the sharehold-
ers of the county organizations, and
the capital gradually will be retired,
and the institution will be self sup
porting.
The method of, organization is
something as follows: Some person
interested in the movement gets GER
tain blanks and applications from the
department. There must be 10 mem
bers willing to come into the local
organization, and all shareholders
must not only own land, but must
live on it. In the Madison organiza-
ton there were IA members in the
original membership, and more may
enter upon making proper applica-
ton. 1t is desirable that there be
only one organization in a county
though there may be more.
Loans on land may be made up ia
so per cent of its valuation, as ap-
praised, and 20 per cent of the i'm
provement value in addition, and in
sums of from 500 to $40, 1000. The
rate of interest is 5h per cent. I'm.
der the plan of amortization adopted
for the gradual payment of these
loans, enough is added to the nom
{ inal rate of interest to mature the
/ loan at the expiration of the term
| Loans may be made for terms vary
: ing from 5 to 40 years. The expert:
5 recommend that they be for the 81
2 year estimate. The additional cost |:
: nominal, consisting of the expenses
of the appraising board and the Off
cial appraiser from the central banl
4 at Omaha.
. The operation of the scheme is thu
( attractive feature. The loan may b.
5 paid at any interest paying date
I which is semi-annual, after the frs
, five years. But this is optional
For the loan runs for the term o
| years and if the interest payments arr
I kept up the interest and principal arr
| automatically paid off in full by thu
5 interest payments made during thu
, time. However, the borrower mus
take out 5 per cent of his loan IL
; shares in the federal association
which are paid for in cash or de
Quoted from his loan. These may b.
considered a good investment, how
!, ever, for he gets dividends on them
. and they are ~non-taxable.
Mr.. Olstad says that it might lool
> like a short-sighted policy for banks
which derive a goodly portion o
their income from the negotiation o
farm loans, to further the interest o
the federal scheme. But bankers ar
:, looking further ahead in these late
years than to the benefits immediate
ly %accruing, and confined to a small
cash benefit. They know that tn
continuation of their prosperity de
ponds on the solidarity of the com
munity and the people among whom
they do business. And the matter o
! making loans is of little consequence
when the condition of the country !
i. prosperous. And the men Of broad
err comprehension are backing thi
new way of financing farming opera