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Show Forming R. C. Ass'ns (From The Saturday Evening Post) After reading all I could find about the Rural Credits Law and having been cramped for money to do business on, and being already al-ready burdened with a loan at a rate of interest which kept my nose to the grindstone to meet, I went over to Will Allen's one evening, and together we threshed thresh-ed the thing out, he being in about the same fix as I. This is how our National Farm Loan Association was started. Farmers are a pretty conservative conserva-tive class. They must be; for new things are experiments, and the farmer who tries an experiment-on anything but the smallest small-est scale is sure, if it fails, to sink in it all the profits from much larger operations. This being the mental attitude of the neighbors, Will Allen and I had our work cut out for us in persuading per-suading them to consider the matter of forming a National Farm Loan Association. It seemed sort of presuming on our part to dive right in and plunge on a new system. But we were convinced, and we worked to convince our friends on five points: (1) Land owning farmers can, under the Federal farm loan act, procure mortgage loans much easier than at commercial banks. This is because commercial banks need to keep their money at command com-mand all the time, and ought not to be asked to loan much money on farm mortgages. (2) The rate of interest will be lowet) under the Federal farm loan act than it has been, and more uniform all over the country. coun-try. This is because the law enables en-ables great quantities of farm loan bonds to be sold in denominations denomi-nations of from $25 to several hundred dollars, and thus even poor people will be able to invest in farm loans. These bonds will be eagerly sought for by investors, invest-ors, - small and large, because each of them, instead of depending depend-ing on the success or failure of on particular farmer is based on the general success of farms all over the country, and it can never be that all farms are failures. fail-ures. There is a guaranty fund back of the mortgage, in the form of the capital of the local association, and each one is not only guaranteed by the local National Farm Loan Association that indorses it, but by the bond of a great Federal Land Bank, taking in one-twelfth of the United States. Each bond is not j only guaranteed by this Federal Land Bank, but is indorsed by 11 others just as good. In other words, no farm-loan bond under the Federal farm-loan farm-loan act can be unsafe unless all the farm-loan bonds made under it all over the United States are unsafe. Therefore they will command the lowest rate of interest in-terest that the lender is willing to accept on a perfectly safe security, which is not taxable. That last feature ought to help a good deal. Interest rates ought to be much more uniform, because the safety is uniform; and the Federal Land Banks ought to have no difficulty in reaching loanable money, where-ever where-ever it exists. That has been the trouble in our neighborhood; money that wanted to invest itself it-self in farm loans either didn't, know of our local needs or was too far away to care for dealings with us. (3) The farmer himself may choose how long a time his mortgage mort-gage shall run; and may pay off in whole or in part at will after five years. This is a great advantage, ad-vantage, as every one of the neighbors could see. Mr. Peterson, who was one of the last we canvassed, said that he wanted to make a long-time loan on the amortization plan, but that there' was always possibility pos-sibility that he would come into some money, which he might get next year or might not receive re-ceive for 30 years, or might never get. If he got it, he wanted to pay off his loan. But when we showed him that after five years he could pay off the loan whenever he had the money, or make partial payments as low as $25. he decided on a loan that would be paid off in 36 years by paying 6 per cent a year. This feature of the Federal farm-loan farm-loan act seemed to appeal to everybody. It provides so many easy methods of repaying the loan. (4) The Federal farm-loan act provides for those who are not landowners but who are in shape to become owners of producing farms bv getting loans. (5) There isn't a lot of red tape to be tied, untied, unravel- ! ed, and bothered with. That was hard to understand at first. We were afraid the thing would be so complicated that it would be too much for us, but we found it was as easy as rolling off a log provided we had good security and wanted the money for purposes that are proper under the law. It really was fun after we got into the business. It was hard to get some in, because they were timid as to the effect it would have on the holders of their present loans. "What if we don't get these loans after all?" ashed Mrs. A. L. White, who had been struggling struggl-ing with a $400 mortgage since her husband's death. "Suppose the folks who have mortgages mort-gages that we are planning to pay off get mad when they find we are forming a National Farm Loan Association and call in our loans, and then we fall down on getting the money? "We won't fall down," said Will Alien. "The Federal Land Bank has the money to begin work with, and after business is begun we'll have no difficulty. They don't have any in other countries. We may not get quite so cheap money as we hope to do: but we'll get the money. Besides, the people who nold the mortgages aren't that sort. What they'll do is to begin buying buy-ing the new Federal farm loan bonds. And, though they won't get quite so much interest, maybe, may-be, they'll have loss trouble and will own something that they can sell or borrow on anywhere no foreclosures, and a great Gov-', Gov-', eminent svstem of land banks U: ' do business with, instead of wondering whether you and I, ! and Charlie, here, are going tc be on the dot with our interest. It isn't going to make anyoiu J mad: and it won't make an difference if it does. This thins lis not going to fail. You trus' j Uncle Sam, Mrs. White!'' j But Mrs. White didn't conic ;in. She said she knew where she stood under the old mort ', gage, and as she didn't want t borrow any more she though she'd let bad enough alone. It took just about a week ti get 10 of us together, who rather rath-er thought we'd go into the thing and form a National Farm Loan Association. Will Allen said, though, that some always i dropped out at the last minute because of cold feet, or something some-thing else: and we had better get plenty while the getting was good. So we went on and col- leeted ihe names of seven more. It looked as if we should have 20 r members by the time we got : our charter: for. though it was true that there are always some ? who will drop out when . you are ( obliged to have them, it is equally - certain that some will corne in i unexpectedly when you can get t along without them. Human beings are made that way. It was a rather exciting time |