Imperial Valley press., 1926-02-13
FARM, HOME LOAN
ASSOCIATION IS
ORGANIZED HERE
fContiued from page ~

land Bank system, capitalized at
$50. 900. coo. subscribed by the Unit
ed States treasury. This capital was
to he refunded to the government
by the farmers purchasing stock at
the rate of > per cent of their loans.
I'VE understand, he said, "that
the farmers in this. the llth district,
now own about 81 per cent of the
stock of their bank. and that the
farmers throughout the United Stat
; have refunded to the government,
all excepting one million of the en-
tire capitalization. Loans made by
the Federal Land Banks are not
made directly to the farmers, but
are made through farm loan asso-
CITATIONS, composed of groups Of
farmer borrowers. Each district
bank is managed by seven directors;
three of these directors are elected
directly by the farmers, three are
appointed by the Farm Loan Board
Of Washington. ID. G., which has
supervision over the banks. and the
seventh director is selected by the
prospective directors nominated by
the farmer who received the highest
vote. SO the farmers have within
their power to elect or nominate four
ont OF the seven directors in the
Federal Land Banks, in which they
own practically all the capital
stock. These banks have accom-
pished a great deal of good and on
the whole are very successful, con
sidering that they are comparative
~ new institutions.
Help Pay for Land
- 1t was probably not contemplate
ed by the trainers of the Farm Loan
act that the bank could service all
the requirements of farmers for real
estate loans. but to the extent that
they have served the farmers they
have relieved the strain. Banks have |
restrictions against certain classes |
of loans and loans in certain dis !
tricts. Therefore. il is necessary to !
find another outlet to finance loans !
which are not acceptable to them.
THE readjustment OF conditions |
since the war brought about an
acute credit condition in the agri- !
districts and it was found |
necessary to do something to estab- /
lish an intermediate credit for farm
ers. That is, credit for a longer /
than that properly offered |
by the banks (six months) and one .
OF less duration than that offered /
by land banks, which is from 20 to ,
SO years, SO i'll 1923 congress passed +
the Agricultural Credit act. This .
provides for loans to farmers and /
live stock men for their seasonal !
operations. These loans cannot be !
obtained by farmers directly from
the bank, but are made through Ag- !
ricultural Credit corporations, which |
endorse the farmer S note.
In order to get this credit the !
farmer must show that the money is ,
to be used for agricultural purposes.
He must have an adequate plan for
repayment to assure the payment of
tn note at maturity. The prompt +
payment OF these notes when due
establishes credit for the bank. This
enables II 10 sell its debentures in
he market and obtain credit for the
tanners, 50 il is imperative that
notes be met when due, or else the
entire credit system will break
down
Members Of the advisory board,
who will give their time to assist
N the successful organization and
operation of this new system of
.o&ns are y. c. Finney, d. K. Craw-
ford, j. /. Dubois, B. d. Irvine. R.
:. Htarner, w. a. McFadden, l.. s.
Acagle, John Gresham and NJ. Zum-
stein.