Show FARM LOAN AT ACT IV from the point of view of the investor dy by frank it wilson federal loan bureau washington 1 U C farm lands have hae always been regarded as the safest security in the world hut loans made ti farm arm landi ads have generally exacted a higher interest rate thun than loans on other good there are several reasons for this such lonna loans arc not readily transferable 1 P marketable farm loans are usually desired for long periods A loan for less than uve live years Is usually of little value mine to the former fanner it if tile loan Is made for the purpose ot of buying land tile the farmers fan ners lance to pity pay it off Is to malce make the money out 0 of f tile the hind annd it la Is against reason to expect that land will pay for itself in five years jears well managed commercial banks cannot make a business of lending money on farms and carrying tile the loans themselves it Is not good banking it ties up their funds in permanent investments and if persisted in continually would ruin any bank tina this filet fact limits tile the supply of local money for farm loans and partially accounts for high interest rates on them provides needed agency the farm lands of the united states constitute a great mass of valuable assets against which money ought to be borrowed at fair rates of interest kut but it hua has been it chaotic mass of value no agency has ever undertaken to assemble this mass of assets into negotiable form so that it could be readily handled as a marketable security now the government steps in and provides tills this agency agency it says to the farmer who wants to use ills his land as security rity 9 you join a national farm loan association so and contribute your mortgage to a great federal land bank pool of mortgages we have provided tile machinery for tills purpose and adopted rules for its operation so that tile interest of nil all will be safeguarded when your mortgages are arc together a federal land bank will take tak these mortgages and esuo bonds against them sell tile the bonds to investors and relend re lend tile the money to farmers tho the pooled mortgages ot of tho the farmers of the united states will bo be security for every bond the high character of this security means that people who have money to invest will jump at the dunce chance to put their savings up against your security at a low rate of interest we will anvill lot let y you ou I 1 have bave tills money tit at actual cost to us plus not to exceed 1 per cent to cover the cost of operating this his money as dembling sem bling and money lending machinery 11 attractive to the investor then uncle sam turns to tile alio lu iu vestor and says wo we have enabled the farmers of the united states to give us their massed mortgages we tire are offering you bonds winch which are in reality first mortgages against the forms farms of all who join tills this pool it is the best security in the world because every dollar a farmer borrows Is represented by 2 worth of land plus the stock ach each farmer has purchased in ills local ao association elation to make these bonds even more attractive so al as to eventually give the alie farmer a lower interest rate we have exempted them from all forms forma of taxation even uncle sam sain will not collect any tax from them thein nor from the income upon them no state or municipality mity may tax them wo we have made m ido those these bonds in small denominations from 25 upward so their purchase will be cay caty among people with small bangs ta angs find and we will have tile bonds prin printed teI find and engraved by tile govern government bureau of engraving and printing to protect them against counterfeiting ter felting find and the alie united states secret service will watch over them so tho the farm loan act in addition to providing money tr far land purchase and farm provides a new form of security which ought to become one of the most popular in existence because it Is based on tho the land values of the entire country |