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Show SECOND MH 15 GiveniHi Federal Farm Loan Law Improves Conditions for Agriculturist. OFFERS GOOD TERMS Farmer Given Batter Opportunity Op-portunity tq Own Acreage Acre-age Instead of Renting. Special to The Tribune. ' WASHINGTON, D. C, Nov. 3. It will Interest the farmers of Utah to learn that the second mortgage is about to come into He own. The new federal farm loan law will put the second mortgage right In the center of the map, ao to speak- ' Indirectly, by facilitating the placing of second mortgages, the new system is expected ex-pected to work out much more advantageously advan-tageously to the farmers than was at first anticipated. It Is predicted now by financial finan-cial experts that under the new system the second mortgase will be as deairabie an investment as the first mortgage heretofore here-tofore has been. While the federal farm banks will loan only on the first mortgage, it is believed that private investors will eagerly piae tiieir holdings in second mortgages. The rise of the second mortgage on farm land as an investment is due directly direct-ly to the terms on which the farm loan tanks are to furnish money to borrowers. The Jaw forbids a loan in excess of BO per cent of the value of the land offered as security and the farm loan bankn cannot go beyond that amount. Furthermore, they will loan on long time, twenty to thirty-six years, or longer. Theae terms make conditions ideal for placing second mortgages. There is a margin of security secur-ity between the 50 per cent of valuation which the government exacts and 75 per cent of valuation which offers an admirable ad-mirable basis for second loan. Is Rendered Safe. Then the Becond mortgage probably would not run over five years and thus a loan could be placed of, say, 25 per cent of the value, running for riv years, that would be as safe as new wheat in a bin. The investor seeking a second mortgage mort-gage would know that the federal land bank had made a careful valuation of the land and that its valuation, conservatively marie, probably would be bulow, rather than in excess of, the true valuation. Thus the federal farm loan system, without with-out cost to the investor, will furnish an admirable groundwork for second mortgages. mort-gages. The splendid opportunity which the farm loan system presents for the placing plac-ing of second morrages gives a chance to the renter who wishes to buy a farm, but who has not saved 50 per cent of the purchase price of the land. In a very interesting in-teresting statement given out by the federal fed-eral farm loan board, P. W. Goebel of Kansas City, president of the American Bankers" association, tells how the renter will be benefited. He says: "I would lend freely on second mortgages mort-gages so long as I could-see that the interest in-terest and the amortizej payment on t'ne first mortgage and the interest on the second mortgage and upkeep of the land would still be less than the rental value of the land. "We will say that a young man who has worked fnr a farmer a number of years, or a man of middle age whom I have known for years who has rented a place, comes to me and says: 'I have J10O0 and I have two span of horses and some cows and some sows enough reasonably to stock eighty acres of land. I have got to pay 550 an acre for the land. I can get a loan through tho National Na-tional Farm Loan association for 2000. will you loan me the other 31000?' Better for Farmer. "Now, it ia a very easy proposition to figure it out. I will figure that on the first mortgage of $2000 he will pay $120 interest at 6 per cent. I am figuring now on the maximum. He will pay $20 on the amortization fund. Now, I loan him the S1000 at 7 per cent, if you please. He will pay rne $70, and I will figure that his taxes cost hirn 50, which makes a total to-tal of $290. "Now. that eighty acres of land if he rented it would cost him anywhere from 5325 to $400 a year rental. It goes without with-out saying that he will take more interest 1 In that piece of land as an owner than j ds a renter. He will take better care of it and Improve It. It will be Improved, rather than deteriorated. It does not take a great stretch of the imagination to see that this man, with the $1000 I loaned him, can pay on an average of $100 a year on the principal In other words, he can retire the $1000 I am loaning him in ten years. Then he will simply have a proposition with which, with any intelligent intelli-gent work at all, he will absolutely make a living and the small sum he pays yearly to retire his loan finally will bring him out of debt. "Tho result of these long-time loans will also be that more of the Income from the farm can be placed into equipment for the farm ; equipment not only to bring larger returns In dollars to the farmer, but that will make the family feel as though they want to stay there. To my notion, the greatest lure of the city is the fact that these farmers' wives and daughters come into the city to visit friends, perhaps, who have modern equipment equip-ment in their house;?. It appeals to them more strongly than anything else and makes them more dissatisfied with farm life than anything else. Now, with the bugaboo that the mortgage in going to come due in two or three years and don't know how r am going to be ahle to renew it, or I don't know what I have to pay,' there may be stagnation In land values. With that bugaboo removed, anyone any-one who has the welfare of the farmer at heart can readily advise him: 'Now, put some money Into your house tand make it modern, so that you can makd your family feel that they have the same chances for comfort and pleasure as the average city laborer has.' " |