nwiarqw
Commoner
'AUGUST, 1916
13
resent tho public Interest, and six local direct
ors, resident in th district, shall bo elected by
tho farm loan associations who must be stock
holders in th bank. Th Federal Farm Loan
board shall designate on of its appointees to
act as chairman. Th act requires that at least
one- of the three district directors shall be ex
perienced in farming and actually engaged at
tho time of his appointment in farming opera
tions within the district. Any compensation
paid to the directors must be approved by the
Federal Farm Loan board.
OFFICERS OF LOAN ASSOCIATIONS
Each loan association must have a board of
directors and a secretary-treasurer. Tho direct
ors shall servo -without pay. The secretary
treasurer shall receive such compensation as may
bo determined by tho board of directors. The
association must appoint an appraisal committee
for the purpose of valuing lands offered as se
curity for loans. No member of such committee
shall have any interest in tho property upon
which ho passes.
FUNDS FOR CURRENT EXPENSES
To provide funds ,for current expenses, the
loan association may retain as a commission
from each interest payment not to exceed ono
eigthth of 1 per cent semi-annually upon the un
paid principal of the loan. This commission is
to be deducted from the dividends payable to
such, farm loan association by the federal land
bank. If the commissions are not adequate, and
an association does not wish to assess members
for current expenses, it may borrow at 6 per
cent from the .federal land bank to an amount
not to exceed in the aggregate one-fourth of its
bank stock.
RESERVES AND DIVIDENDS
The law requires both the land banks and the
farm loan associations to make provision for
certain reserves-before they can pay any divi
dends. AGENTS OF LAND BANKS
In sections where local conditions do not make
tho formation of associations practicable, the
Farm Loan Board may authorize the federal
land bank to make loans through agents ap
proved by the board. These agents are to be'
banks, trust companies, mortgage companies or,
savings institutions, chartered by the state.
They may receive as compensation the actual
expense involved in transacting the loan and in
addition thereto a sum not to exceed one-half of
one per cent per annum on the unpaid principal
of the loanB made through them. When the
Farm Loan board decided that a locality is
adequately served by farm loan associations, no
further loans are to bo made through agents.
JOINT-STOCK LAND BANKS
In addition to the system of 12 federal land
banks and the national farm loan association of
borrowers, the act permits the establishment of
joint-stock land banks and authorizes them to
carry on the- business of lending directly to bor
rowers on farm mortgage security and issuing
farm loan bonds, These banks must have a
capital of not less than $260,000. They are
under the supervision of the Federal Farm Loan
board, but the government does not lend them
any financial assistance.
The joint-stock, land bank is free from any
of the conditions imposed on the federal land
banks. Subject to the 50 and 20 per cent value
limitation and the limitation as to territory, the
joint-stock land bank may lend more than $10.,
000 to a single individual and it is not restricted
to making loans for the purposes specified in the
case of the federal land bank.
The joint-stock bank, like the federal land
hanks, can not cliarge an interest -rate on farm
mortgages in excess of 6 per cent, nor shall such
interest rate exceed by more than 1 per cent the
rate of interest paid by the bank upon its last
issue of bonds. A jotnt-stock bank is limited
in its bond issue to 15 times its capital and sur
plus. Among the restrictions placed on these banks
under the act are (1) that their mortgage must
provide for an amortization system of repay
ment such as is prescribed in the case of loans
through the federal land banks, and (2) that
they shall in no case demand or receive under
any form or pretense any commission or charge
not specifically authorized by the act and ap-
Proved by the Farm Loan board.
The bonds of the joint-stock land banks are
exempted from taxation. Their capital stock,
however, is not exempted.
GENERAL PROVISIONS
The law, through the Farm Loan board, pro
vides the necessary machinery for frequent ex-
THE FEDERAL FARM" LOAN ACT
m.ti?18 act Provldes or too creation of tw olve Federal Land banks and permits tho es
tablishment of any number of joint-stock la nd banks for tho purpose of making loans at
a reasonable rate of interest, for long periods of time on farm lands..
A Federal Farm Loan Board has compl eto control over theso banks.
A FEDERAL LAND BANKS
Twelve Federal Land Banks are provided, one in each of 12 districts into which th
country will bo divided. Theso banks aro empowered to lend on first mortgages on
farm lands in amounts of $100 to $10,000 for approved purposes. Tho loans aro to b
made through farm loan associations and agonts. No loan may be made for more than
50 per cent of tho value of the permanent insured improvements upon it.
National Farm Loan Associations local organizations composed exclusively of bor
rowers are authorized. These associations must bo stockholders in tho land banks in
proportion to the amount their number wish to borrow. Evontually all stock in th
federal land banks will be owned exclusively by theso associations.
A reasonable interest rate Is established. Tho act prohibits tho federal land banks
from charging more than G per cent on any mortgage or requiring fees not approved by
the farm loan board.
Tho borrowers will share in the net proflts of tho bank because they aro stockhold
ers. It is contemplated that ultimately the borrowers will bo tho only stockholders.
Long term loans aro provided by authorizing mortgages for periods of from 5 up to
40 years.
Small annual or semi-annual payments on tho principal aro made a required feature
of all mortgages.
B JOINT STOCK LAND BANKS
Joint-stock land banks are authorized. They aro corporations for carrying on the
business of lending on farm mortgage security and issuing farm loan bonds. They are
to be under tho supervision of the farm loan board, but tho government will not invest In
them. Subject to geographical limitations and subject to tho 50 per cent and 20 per cent
limitation,' theso banks can lend to an individual any amount they wish, and for any
purpose. They can not charge an interest rate exceeding six per cont and such rate
must not exceed by more than 1 per cent tho interest they have paid on their last issue
of bonds. Their mortgages, however, must provide for amortization paymonts. These
banks are prohibited from charging, under any pretext, fees or commissions other than
those authorized by the act.
ir
aminations of the banks and the associations, for
the proper cancellation of mortgages, and for
the safe custody of mortgages offered as security
for bonds. When any mortgage offered as se
curity for bonds is withdrawn, the bank is re
quired to replace the security with other mort
gages or with other satisfactory collateral.
Heavy penalties of fine or imprisonment, or
both, are imposed for violations of tho act, mal
feasance in office, fraudr embezzlement, defal
cation, or other illegal practices.
Iowa women came within a few votes of win
ning suffrage last primary election. By the next
time Iowa comes to vote on the proposition, it is
safe to predict that a majority of tho men will
be willing to concede that the women of that
state are as intelligent as those of Wyoming,
Colorado, Utah, Idaho, Washington, California,
Arizona, Kansas, Oregon, Alaska, Montana and
Nevada, where they have the full right to vote.
High tariff organs are poking fun at the dem
ocrats because the administration has given its
sanction to a protective tariff on 4ye stuffs to
enable American chemists to get capital to work
out the formulas necessary to establish the in
dustry in this country. But the high tariff or
gans neglect to say that the only tariff they
favor 'is one that continues forever, without re
gard to the actual needs of the business.
Every high tariff beneficiary and advocate in
the country was a strong backer of the giant
army and navy plan that congress was so strong
ly urged to adopt. It is not difilcult.to trace tho
connection. The more money the' nat!6n spends
on armament the greater its need for revenues,
and there isn't any easier way to get the higher
taxes from the people than by taking it from
them at the custom house.
The people who have the money resulting
from the great prosperity of the country are not
likely to be greatly worried over the fact that
the republican orators insist upon so much, that
because there is a democratic national adminis
tration they really should be mortgaging their
homes.
The republicans insist that the prosperity the
country is at present enjoying is but temporary.
Which is only another way of saying that they
think democratic prosperity can not last any
longer than republican prosperity did.
PRESENT PEACE PROBLEMS AND THE PRE
PAREDNESS PROGRAM
(Continued from Pago 11)
stood about the cross mocked and jeered, and
" said: "Ho is dead." They thought that was the
end of tho story, but it was the bogiunlng. From
that day on the power of Caesar waned and th
power of Christ increased; throughout tho ages
He has grown until He is today the command
ing figure of the world, aye, tho growing figure
of all times. This great nation, with an ocean
rolling on either side, with a mountain range
along either coast that all the armies of all th
world could never cross, is in better position
than any other nation that ever lived or lives to
day to set the world an example. Nineteen hun
dred years ago wise men came from the East,
following the Star of Bethlehem and seeking
Him who was to be born tho Prince of Peace. If
they could do this, inspired only by prophecy
unfulfilled, this great Christian nation, after
nineteen centuries of demonstration, should be
able to go as a wise nation from the west carry
ing gifts to relieve the distress on both sides,
and appeal to these people to come with us and
lift the world out of the bloody mire and up to
a plane upon which a permanent peace can be
built. Some talk about going into this war, if
honor requires. Oh, my countrymen, there is
no honor that we can secure oi detenu by going
into this war that is comparable with the honor
that we can win if we can persuade the warring
nations to turn, like prodigal sons, from the
husks on which they have fed and make the fu
ture of the world bright by establishing co-operation
instead of combat, and friendship instead
of the hatreds out of which theso wars hav
grown.
It is fundamental to tho policy of this govern
ment that if business will let politics alone gov
ernment will let business alono. Any conflict
that appears in Washington can invariably be
traced to the fact that business won't let pol
itics alone. As long as that happens business
won't be let alone because letting it alone means
that it will control politics and therefore govern
ment. This is an issue every serious-minded
voter should study carefully before ho Votes th
republican ticket and thereby puts business
again IiT'tho saddle.
Colonel Roosevelt and Mr. Taft have not yet
spanned the bloody chasm. Wo trust that this
will not be considered as reflecting upon the en
gineering abilities of Candidate Hughes. -
H
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