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Show THE EFFECT OF THE FARM LOAN ACT ON FARM TENANTRY (By FRANK R. WILSON.) Students of American agriculture have been greatly concerned ovor the remarkable Increase In farm tenantry-Years tenantry-Years ago when land was plentiful and cheap, tenantry was almost unknown. un-known. The man who wanted to farm simply went out and purchased cheap land or settled on government land Practically all of the land was formed by owners. When the supply of chap land became be-came exhausted and most of the land occupied, there was no longer an outlet out-let for the Increasing number of landless land-less farmers. Consequently, those who wished to engage in the business were compelled to dicker with those who already held title -to the lands. The result was a rapid and astonishing astonish-ing Increase in the value of lands. Farm land ownership now represents billions of dollars in land values w hich constitute a positive bar to the getting of farm homes by landless farmers. The question is frequently asked. "If the farm loan act provides cheaper money for land purchase, will it not make it easier for 6ome men to get credit to monopolize land, increase land ;i)ues, make it harder for '.he tenant farmer, and perpetuate and broaden the tenant system""' The answer is, that the privilege of borrowing under the farm loan act is denied to any except actual farmers. It is denied the landlord and the speculator. specula-tor. Furthermore, the size of the loans is limited to $10,000 to check the tendency ten-dency toward too large farms and land monopoly. So, It will be seen that the farm loan act gives to the rich no additional ad vantage in buying land, but does give in added advantage to the landless. It exertg Its financial pressure, and will ilways do so, In favor of actual work-j ug farmer ownership and against ab-enteo ab-enteo landlordism or the holding of lands out of use for speculative purposes. pur-poses. But It has oeen frequently asked how a credit dystem that lends only up to 50 per cent of the value of the land enables the tenant to buy a farm if iho tenant has not saved the other 50 per cent. To (his man the avenue for acquiring acquir-ing the other rju per cent is the second mortgage, given either to the original owner of the land or to a private money lending agency Financial men predict that under the farm loan sys tem the second mortgage will take on a new value. The tenant who wants to buy land indicates what land he intends to purchase pur-chase when he joint the farm loan as sociatlon. Then when he gets his loan up to 50 per cent of the value he pays that down to the original owner of the land. Then he executes a second mortgage mort-gage to the original owner, this mortgage mort-gage to come due, say in ten years. The first mortgage under the amortization amortiza-tion plan will be gradually reduced each year and tho required payments thereunder will be so small as not to menace the ultimate security of the second mortgage. This will be an advantageous ad-vantageous arrangement for both parties. The original owner will get a 50 per cent cash payment for his land, which is more than he would ordinarily get in a real estate transaction The tenant ten-ant will find that, unless he has paid an unduly high price for his land, his annual payments to retire both his first and second mortgages will not be as great as the rent previously paid. In some of the states second mortgage mort-gage banks are already being formed by private individuals to lend money to landless people of proper character who want to buy farms and who have not saved the 50 per cent as a nest egg. It is believed by financiers that men with farming ability and integrity will not have difficulty in getting the proposition financed. It depends altogether alto-gether on the character of the borrower. bor-rower. nn |
