Show FINANCIAL AID FOR FARMERS washington aug 6 after many years of investigation and debate to develop the best method of providing financial aid for the farmer at normal interest rates and on long time congress has passed a farm loan act president wilson liaa has named members of the board which will administer its provisions and the work of organizing the vast new system is about to begin secretary mcadoo ex officio member of the farm loan board which will be at the head of the system predicts that it cannot be in operation for at least six months and probably loans loana cannot be made before next spring in operation the system to some extent will do tor for the farmer what tile the federal reserve system does for the business man the farmer will begia be given opportunity to secure money on his most available commodity his land just as the merchant and manufacturer has been enabled thru the federal reserve system to have ills his paper based on oil commercial transactions find a ready market the new scheme has many points of 0 resemblance to the federal reserve system but in many essential features it is entirely different in no wai way will the banks created under tinder it do commercial banking and while it is possible that in years to come they may have funds to loan that will amount to several hundred million dollars it is not believed probable that the system ever will have the resources of the reserve system the act provides for a division ol of continental united states into twelve land bank districts with a federal land bank in each the work of designating these districts and selecting the centers at which the loan banks banis are i to be located will be tile the first I 1 important duty of the farm loan board and it is expected to result in just as many bitter contests as preceded the announcement no of the lines of the twelve federal reserve districts and the location of federal reserve banks the only directory provision in the farm loan act says that land banks shall be located with particular reference to the farm loan needs of the country so the board will have wide discretion many applications from cities particularly in ili the northwest and southwest already have been filed in the treasury but tile the board will not make public its con conclusions clu until it has traveled over the country and held hearings in many cities each federal land bank must have a minimum subscribed capital of before it can start business if K within thirty days after books are opened tor for subscriptions to the stock of any of these banks individuals or corporations have not subscribed that amount the secretary of tile the treasury is directed to subscribe tor for the united s tates states in the needed sums stock in the banks may pay dividends when earned but the united states as a stockholder cannot participate with others the banks will not except in special cases loan direct to farmers but thru the agency ot of national farm loan associations which may be organized to any number in a land bank district by any ten owners or prospective owners of farm arm land who desire to secure loans on farm property applications for charters tor for these associations must go up to the farm loan board and may be refused by it no association will be chartered unless it is shown that signing members desire loans to talling at least in applying for membership in an association a farmer must take 5 per cent of the face value of the desired loan in stock ot of the association applications for loans are to be passed upon by a loan committee of the farm loan association loans will be made only on first mortgages or farm farin property and the value of the land will be the main consideration the land will be subject to inspection by an appraiser of the farm arm loan board loans will be made only tor for purchase of land for or its improvement or for purchase of 0 live stock equipment fertilizers or to provide provida buildings on a farm arm or to liquidate indebtedness existing when the firby association Is 13 formed in the foun county where land Is located no loan will bo be mado of 0 moro more than nor less than interest will not be charged greater than 6 per cent the continued 0 on a page three FINANCIAL AID FOR THE FARMERS continued from rom first page loan itself will be reduced thru an amortization plan providing for reduction by annual or semiannual semi annual payments on the principal no mortgage shall run tor for more than forty years nor less than five and there are tile the necessary provisions pio visions in the law tor for satisfaction of overdue interest or amortization payments the money to be loaned will come thru abru the federal land banks passed to the hands of the national farm loan associations and to the farmer the capital stock of the land banks will not give them much loaning power so congress increased that power greatly by authorizing tho the banks to issue farm loan bonds and sell them in the open market the act provides that when a federal land bank has loaned to farmers it may issue a corresponding amount of farm loan bonds and that tho the total that may be issued by any one bank on a minimum capital of is to be twenty times that capital this would give each bank and the whole system to loan on first mortgages farm loan bonds are to be made attractive by payment of lotmore not more than 5 per cent interest and a provision that they shall be exempt from federal state or municipal taxation they are made legal investments for trust funds they are not to be obligations of the united states but will have behind them tile the first mortgages on oil farm loans these mortgages mon gages also ore are exempt from taxation in case local conditions do not favor organization or of farm loan associations land banks may be authorized by the farm loan board to make loans to far mers mere thru agents it ap approves provA such as banks trust or mortgage companies and the law permits establishment of joint stock land banks to lend directly to borrowers on first mortgages of farm lands these banks will be under supervision of the farm loan board but will not be assisted by by federal land bank funds as will loan associations the stock banks however which are to be capitalized at not less than each also may issue farm loan bonds exempt from taxation and based on first mortgage securities to the extent of fifteen times their capital stock these banks are afe subject to the same provision of the law as loan associations in respect to interest rates amortization etc in the beginning the federal lauf land banks will be gover directors appointed by tire the farm loan board but after subscriptions from loan associations to any federal land banks capital stock reach an elective system will become effe effective I 1 ive with three directors chosen chose b t the xe board and six by the loan associations the board will approve compensation paid directors and officers of these banks the loan associations will be directed by unpaid officers except a secretary and treasurer or secretary treasurer banks and loan associations will be subject to tile the customary examination by Pei persons soils appointed by the farm loan board arid and the law provides penalties for infringements of its provisions or counterfeiting of farm loan bonds cities which have applied or which have been recommended for banks include california stockton and sacramento colorado denver iowa orange city and sioux acty kansas topeka minnesota minneapolis st paul and crookston nebraska omaha and lincoln north dakota bismarck oklahoma oklahoma city oregon portland south dakota aberdeen and sioux falls texas dallas fort worth houston arid and waco washington spokane wisconsin madison and wausau claims of these cities nave not noi been considered as yet but it is probable they will be presented in detail during the hearings |