Pueblo chieftain. (Pueblo, Colo.) 1889-current, 1921-07-18
BY FREDERIC j. HAsK1N

BY FREDERIC j. HASKIS
Washington. u. C. July I5.-A
member of the Federal Farm Loan
Board has sailed for Porto Rico for
an inspection trip OF this island pos
session with n view OF sscertalning
whether the provisions uf tho Farm
Loan Act can be extended to tho
Porto Rican farmers with certainty
of success.
About six months ago Congress
passed an amendment to the Farm
Loan Act granting tho Board au-
thority to extend its work to Porto
Rico, but making this extension De
cretionary with tho Board II is the
confident belief Of the members Of
the Board that the island farmers will
1T INTO the Farm Loan scheme with
cut any hitch. II a favorable report
is made by w. s. a. Smith. OF Iowa.
! who was chosen for this missicn. n
branch of the Federal Land Bank
situated Mt New orleans will lie es-
tnblished AZ some point IN Porto Rico.
Tho cities Of san Juan. the capital,
and Ponce. on tho southern coast, ap-
pear to he the only contcnders.
So great have the demands on the
funds Of the land Banks become that
Congress recently amended the act
. creating tho system, 50 that tho
Treasury may have on deposit with
those banks at any one time as high
M s3l. 900 900. until fow days ago.
this figure was but $4,000, 600.
This additional fund will enable
the twelve banks to make loans to
farmers turnout tho summer without
/ the necessary OF seeking TO sell an
other Issue of bonds when the market
for them Is not at the best II Is be
lieved that by October tho Farm
Loan Board can adyantaEeously sen
another issue Of bonds, and provide
Itself with additional funds for farm
ers.
The law requires that within fifteen
DAYS after the sale OF m issue nf
bonds that the deposits made by the
Treasury in Land Banks be returned
The system has grown po trem-
endousiy since It's Inception that
members Of the Board estimate that
ten times as much money could he
used as Sven the tremendous amounts
now handled. Up until the last %
May. n resume shows that $4,000
farmers thruout the United states
had taken advantage Of this Federal
credit. and that total n S3bi,000,-
600 had been loaned Ia them. on
these loans. tho farmers have TO pay
per cent interest at present
To balance this huge loan. the
Federal Farm Loan BOARD has sold
600 Tho difference IN the money So
cured from tho sale Of bonds and the
actual cash lent TO farmere was made
IN from slender capital on which
the twelve land lsnks stnrted-sH.-
600 .oOO-and tho profit on the opera
tIons OF tho banks.
Method Used
Tho feature which has fren On dous-
" pppuiarized the farm loan system
is the amortization part ~ o. which
IL obligatory upon all farmers who
borrow money from tho banks. Thus.
on each 81 600 borrowed, the farmer
must return each year 70 IN" Land
Bank from which he got u SOS. These
payments. which apply alike on prtn-
cipai and Interest. in the cours" OF
81 ia years pay off the whole loan.
Tho land banks have been SO sue
cnsgfii In their operations with the
farmers that each year n has been
possible to my a divident Of 6 per
cent to tho National Farm Loan AZ
ISOLATION. This association II made
up Of the farmers who nave borrow
cd money TO carry on their hutineHs.
and this dividend on The capital stock
or the bank is distributed among
thsse mon ms. In effect. a rebate on
the interest they pay for their loans.
The National Farm Loan Asso-
citation Is made up of nearly 1000
county farm loan organizations. ana
as there are but $500 agricultural
counties In the United StateH, there is
an average Of considerably heuer
than one organization TO each farm
ing county.
Before the Board was created,
there was a great deal Of criticism
from members representing tho more
prosperous agricultural states that
tho establishing OF the loan syEtom
intended Almost HnlUIN Tor inc
poorer farmers of the South. This
criticism was made at a time when
southern Senators and Representa-
tives headed nearly every committee
in Congress. and was hard one to
combat The denials made at that
time have been amply borne out by
later developments, however. The