Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-12
FEDERAL BANK IN BALTIMORE
LENDS $76,877, 420 SINCE 1916
Report Shows Farmers of Nearby States
Have Paid Back Sc, los, 1903 on Principal.
Loan Policy Explained.

The farmers of Virginia, West Vir-
GINA, Delaware, Maryland, PernsylVa-
MIA and Porto Rico have obtained loans
from the Federal Land Bank OF Baltl-
more amounting to $76,877, APO since its
organization in 1916 according to the
quarterly report of the Federal Farm
Loan Board On these loans the farm
ers have paid on the principal So. lO6,-
900. making the net loans of this tnsti-
tuition outstanding $68, 768,616 These
loans are made through local national
farm loan associations. They are All
long-term loans for 80 odd years ana
the payments on the principal are made
Systematically by the borrower paying
one-half of / per cent on the original
principal each six months at the time
when he pays his interest on the prln-
cipal.
The Federal Land Bank of Baltimore
is owned by the national farm loan
associations of the district Whlch, III
turn, are awned by the borrowing farm
erS. These associations have invested IN
stock in the bank, according TO tne
Farm Loan Boards report, So, l3l 300.
At the turn Of the year, the bank nao
invested in farms upon which 1t mad
foreclosed $541, 709, at least that Is the
amount for which the farms were car
ried on the books of the bank. A reserve
equal to this amount was set up against
these farms which had been accrued.
OF the total delinquency on Install
ments due, amounting to $l,lO9,48l, a
reserve had been set up amounting TO
$848, 232.
Sales of Farms.
Quite aside from the data contained
in the Farm Loan Boards report for the
close of the year, statement by W.
losko Walden, president of the bank,
shows that that institution sold 184
farms during 1880 compared with 10
in 1929. These sales were made de-
spite the drought condition in part OF
the area covered by the bank and rep
resents an increased sales effort on the
part of the local national farm loan as
sociations involved and the bank.
Ordinarily, we obtain a down pay
ment Of 20 per cent of the sales price"
says Mr.. Walden. 1.-THE farms which
we handle are those Upon which We are
forced to foreclose because the owner
has been unable, for some reason, to pay
his ir1stallments and has become so
delinquent that it is necessary for us to
take over the farm. The bank, OF
course, is not in the farming business
and does not wish to own farms, but 1t
has to protect itself and the source Of
funds to loan-that is, its taX-eXempt
bonds sold to investors all over the
country. At the beginning Of this year,
We had on hand 1876 farms. OF these,
90 were in Virginia, 18 in West Virginia,
"a in Pennsylvania, in Maryland, i in
Delaware and 10 in Porto Rico.
THE bank carries 100 per cent re-
serve against all of these farms and
also against all delinquencies overdue
80 days or more. This gives the Dor
rowers from the Federal Land Bank of
Baltimore, who are the owners through
their national farm loan associations,
sense of security and pride in their
cooperative institution. They appre-
ciate that these farms are worth much
money, but If we set up O reserve
against them of 100 per cent there can
be no question about the value of the
bonds Of this institution, which are
backed up primarily by first mortgages
on farms in the States In which the
bank does business.
THE Federal Land Bank makes what
is known as an amortized loan, that is,
the borrower pays stipulated amount
each six months on the principal as
well as paying the interest. A 5h per
cent loan, upon which an additional l
per cent of the original principal Is
paid, will wipe itself out in 3412 years.
The thousands of farmers who have
amortized loans which they have OBJ
Sdu1SQ OknOuBh AuI1O1SOS Oh 1OCAI Udr
tional farm loan associations in this
district have an opportunity to save
Systematically and thus acquire an es-
tate. During this time their neighborS
who have short-term loans frequently
pay higher rate of interest and COM
missions continue to live with their
loans and make little or no progress in
paying them of. Farming Is not such
a profitable industry, from the stand
point Of cash returns, that a farmer
may hope to make substantial progress
in wiping out his indebtedness II he
does not go about 1t systematically.
The amortized loan, such as the Fed
eral Bank makes through the local ma
tional farm loan associations, frequent
~ enables the farmer to pay OF his
debt with no greater cost to him than
he was paying for a Short-terTn loan In
interest. commissions and other ex-
penses."
Shorter Term Loans.
Although the quarterly report Of the
Federal Farm Loan Board does not
show the number of farmers who have
benefited by the activities of the Taad-