The diamond drill., 1918-03-16
LOANING AREA OF FARM.

FINANCING the biudil idfn HAS pcth
an ever-present problem OF the Fed
eral Farm Loan Board. Some farms
yield much larger returns than other ;
per acre. Also there are tracts OF
land which are too small TO produce
living for family. Where a small
tract Is intensiyely and skillfully cul-
tivated and maintained in the highest
possible state OF fertility IL often
yields surprising returns. These re
turns. however. depend largely upon
the man and not upon the land. A
piece OF land which may produce a
gross return OF $1,000 per acre unde-
one mans management might fall OF
lnder the control OF another 10 only
few dollars an acre. A tract in
tensively cultivated by a man who
thoroughly understands intensive
cultivation might produce an annual
income which would pay interest on
a valuation OF several hundred dol
lars per acre, but IL is, of course, un-
safe to make that man loan on any
such basis unless the land itself, un-
der average conditions, has very
high value Suppose that the sur
rounding land Is worth an average OF
only $50 an acre. Take the specially
skilled man away from the very pro-
ductive tract and will soon fall in
value to about the average OF the
neighborhood.
And yet the farm loan board does
not feel that ii ought to close the
door TO the intensive farmer. He
should be financed wherever IL Is pos
sible He must be financed, however.
on basis which will render the loan
safe even If he should die the day af-
ter the loan is made and the land
pass into hands in which IL will give
only average farmland returns. Il
is for meeting this situation that the
farm loan board has made and pro
the following ruling for the
guidance OF the twelve land banks
"As a basis OF determining whai
area constitutes farm for loaning
purposes the board requires the fol
lowing test;
First, Generally The farm must
be OF sufficient area to yield at the
hands OF an ordinary capable farmer,
putting il to the use TO which it Is
generally adapted and using average
methods, an income sufficient TO main
tain the family of the applicant and
discharge the interest and amortiza
tion payments.
Second Specially Where through
intensive farming o. the practice Of
specially sufficient income has been
regularly derived from tract def
cient in area for ordinary farming,
or whore the application of the pros
pective borrower shows that he Is by
experience capable of producing such
an income from such tract, such
area may be accepted as sufiicien-
provided the land has stable ana
market value sufficient to
the loan applied for. This
ruling does not apply to fruit and OF
chard lands which have already been
the subject OF definite rulings by this
board"
Under the first paragraph OF this
ruling loans may be made TO the or
iinary farmer on the basis OF aver
age skill and efficiency, and no tract
1f land will be accepted as a farm
eligible for a loan under the federal
arm act unless It is large enough to
support the family and take care oi
.he loan under the average farm CON
litions of the neighborhood.
But under the second paragraph OF
.he ruling the intensive farmer or the
nan who practices a profitable spec.
alty. or who shows himself able H.
10 so. will be given financial support
by the Federal Farm Loan System
even though his farm may be to-
small for ordinary farming purposes
provided that the land quite apart |
from II use has a stable and perma-
nent land value which will make the
oan safe whether II is we'll operated |
)r badly operated. or not operated a.
all.
There Is but one RIGHT WAY o.