Show I DAILY DAIL Y HASKIN RURAL RUP CREDITS S IV Proposed Legislation t I I I That Thata a a. new banking system for tor farmers farmers farm farm- farmers ers will be established under federal law se seems ms a n foregone conclusion President Wilson ha has declared that after the pond pend ing general currency legislation is out of the tho Way fa ay the next duty for the admin admin- is toward the American farmer fanner and his peculiar needs He lie expects to tomake tomake make malte rural credit legislation an a administrative admin admin- policy just juat as ho has hu done with the tariff and the currency Just what shape this legislation finally will take cannot b be predicted at this time but the Ula indications aro arc that It may fol follow rollow follow rol- rol low tho the General lines of of tho the bill Introduced by Sena Senator tor Fletcher of ot Florida This bill provides for an entirely now new banking system aye aye- t tem m In tho the United States This hue system will consist of ot three types of or banks tho the local lol bank the state bank and the central bank The local bank ItI It ItIs ItIs I Is proposed shall shah be an association of resIdents residents res res- or real estate owners of or a com corn community i not less lees than ten in number with witha I a capital of or not not less than 2000 and with stock of ot par value aue of ten dollars per share i 1 The state bank will be bo an association of ot otI I i not 1 less leu 8 than thirty local banks and will I render the same sort of service to those these local loal banks that the local bank renders It Its members I j After Atter the state tate bank banks have been bee organIzed organIzed organ- organ I In at least twelve states they In turn will vii form a a. national bank which will serve ser as 38 the capstone of the banking pyramid upon which rural credits will rest This great reat central bank banle will be controlled controlled controlled con con- trolled b by the government and will b be vested with ever every function that can add to Its efficiency a aH ac the great Treat national clearing house of or rural credits Ownership to Be Limited Each local bank shall have not nol less than shares at ton ten dollars per share I I and each share hare shall bo be entitled to one I vote except that no one ono stockholder can v vote tc more than 10 per cent of tho tock stock or ot the bank bunk nor can any anyone one person own more than 20 per cent of a banks bank's stock Dividends shall In no case caso exceed 15 per percent percent percent cent p per per- r j 3 ear Every stockholder will be liable for rOl twice his holdings In stock and surplus until such euch time as the bank shall have earned surplus equal to the amount of Its Us stock and paid-in paid surplus ThIs ThIa i paid-in paid surplus must amount to at least fifteen en dollars per share From this It will be seen seem that the bank must have assets as- as sets of r at I least east dollars per share before before be- be fore the liability of the stockholder stockholder for double the tM amount of at capital capita and paid paid-in surplus shall cease Each local al bank Is II to be managed by a board Of not less than seven members member and each director shall be personally liable Hable jointly my and severally both to the bank and to Its creditors for excess loans an and for loans made contrary to toJ 18 law J No li Ioa loan Joan In excess excels as of or or for or mm mote more than ninety days be he made without the approval of ot the board while real estate loans loana running for tor more than n. n year must boar bear the tha approval of bf a a. majority majority ma- ma of the board each ach member sIgning approval his name In ln the record r b hook book to attest his hi approval The i directors must meet at least once ft month and n meantime the banks bank's af at- fairs will be presIded over over b by py two IWO CO corn com HI- HI one on liX fn On adminIstratIon and one on the appraisement P the one looking after W work rk of the bank and nd tn the the other Ing loans a are value to be upon upon based property UP upon n which Ch The banks anks are to try to avoId avold commercial commer commer- cial business as much as pos possible al though thO they will b bo allowed to do a a. say say- bank business ss The will a specialty of Une tinie deposits receivIng as 88 low as ten and payIng Interest from the date ot of deposit on all sums of a a. dollar and upward CheckIng accounts may be received but bt no Int Interest can be paM paid on them I I I I I I To Classify Loans Loan In the matter or of loans there are a number number num- num ber of classes classe The short term real estate es- es tate loan can be made upon first mort mort- mortgages gages gaces upon property for a perIod of or three y yc years an n and the Interest must not be more than i I 1 per cent higher than the bank pays pas for tor time depo deposits Posits I Lon Long nc term real estate loa loans ma may be handled b by these bank banks When a patron natron wants such a loan he lie will draw a mortgage and the bank will III Write Its guarantee thereon both as BS to principal arid and nd Interest Its Us re recompense for this service being fixed at not to exceed 1 J P per r cent per annum upon the loan which i may run for tor any number of or years cars agreed ed upon up to fifty After Arter guaranteeing the tho loan th the local bank may sell seU It direct or It may forward It i to the state bank banle for tor Its guarantee This bank bonk may In turn sell cell ell it direct or ori It ma may have U It guaranteed by the na national na- na i bank Neither tho the national bank tier Dor the bank can guarantee a loan n until It has haa first been guaranteed by a local bank and the guarantee of a suite state bank Is essential before tho the national bank can guarantee It It Xo No real estate loan Joan ma may be for an amount greater than 60 per cent of ot the assessed value of ot the property upon which It Is based baaed Real estate loans cannot be bo made In InI Instates Instates states without tho the simplest methods of foreclosure or that have ha laws law an any other lions hens other than taxes to take over 0 a l first Onet mortgage c. c Every lone lonC t rm r ul rul jl estate t te loan lon mint t carry dJ with It a provision for a small pa payment on the principal t to o wipe out the tho debt at the lure larger enu o of at f the tho term of ot the loan but this Sm expiration Will ili preclude tho the borrower from not hot much more from tESe time to time a a. a he nM constitute a sinking fund fund for j mC bonds when whon they are du due Loans Loan of nature are arc to be bo made po n 0 tar far eg only for tor p permanent or for tor purchase money men on a tann farn May Take Products as aa Security 4 The local banks bank also viii WIll be to lend money on farm products term or of not a exceeding one Y Rr borrower is b able to produce a l Indorser Short time ioan made on commercial may als alao be paper or convertible other collateral I LEach Each ach hank bank will he be required ij to reserve an amount equal I to IE i perl p. hoi of or its Ite check chock deposits and aM cent Its time 8 S Per cent centor or deposits one third ono third of or th the and el three eighths of or the tho latter e d to be held In iii actual cash In Its banking house The remainder er r rr can kept In other banki approved banks bank It If the tho earnings of or n a. a local bank exceed r IS 16 per cent a year a go o to the surplus and tho other shan hait be used for tor the reduction of or loans Joans After the tho total surplus Jc reach 50 per share making tho the total va value per share Bhare then the entire stock shan bought ought In and canceled d. and the bt thereafter shall be operated hank without ana ih as a a. mutual capital stock and i tere t charges only high enough to S male maIn tam tain the sound status of or the bank Jon n ny surplus of or net earnings e shall b be ba refund rd to the borrowers further r reductions reductions' In of or the Inter Interest shape hape chr of o still ift Immediately after after- Ita ea each local bank will be required to cst ln o. In onn tenth of or Us Its capital l ab and abd paid J In tn lu In the stock of tho the national bank bank anti one fifth in the stock ol or th the slate b ari and these holdings s shall bc be expanded a the surplus of or the local bank batik Incrust inci As soon as ns there are aro a R. sufficient num bar bor of or lo local al banks organized within state the work of forming the state tat b ban n shall be undertaken and tho the bank hank will e have a preliminary or I laId aid o out t at once Their relations 1 i to t lb local banks and to the federal covert will wUl he be told In the next story etory I Follow Pending Fending Currency Measures J Under the A system stem of or local banks l Is Is cd for tor the United State ther therl will wili be carried out Jut the same ideas of ni na n finance that have been heen rated In the pending currency measure There will be that decentralization the tha comes cornea comes from the regional bank system and that government domination and con COD trot that Is 15 provided through the thea a an ap po by the president of a cut suf number or of officIals s of or the centra centre In institution 1 The simple effect of ot the whole hofe st a sUn s n will HI be to create in Iho tho United d State two parallel and nd banking sr sy i the ono one ino a toni for tor general rom com i. i IK merch 1 business and tho other for tor tho the farmer The small amount of ot capital capita that wll wil be he required to start a local hank bank unde und the tho proposed la law will make It ne Ine that there will bo be many times more rut mrs banks than national banks tanks Every Ever litti community of ot farmers can organize or on on- and conduct It In their own I nt a aU U users of or money as well a as In the Int r rest est eat of other borrowers and J lenders Th Th- aim of ot the local bank Is Is' simply to provide pro pro- vide a connecting link between the nu tsar who wants Interest and the needs money moneT 1 Tomorrow Fl r RURAL j V. V State V.-State State and National Rural Bural B Baab |