s
The Commoner
TOL, 16, NO. 9
30 .
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The Federal Rural Credits Act
! Tho fodoral rural credits acl Is ono
; of tho outstanding 'achievements of
Uio present congress.
Why are averago interests rates
paid by American farmers on raort
gago loans one-third higher in tho
stato wliero they aro lowest than the
averago rates paid by tho Gorman
farmer, and hi sorao states more than
twice as high? Because farm loans
in this country aro made direct from
tho individual lender to tho Individ"
ual farmer, run for only flyo years
and aro subject to heavy foes for ap
praisals, inspections, etc., on account
of tho short time, odd amounts and
lack of system,
The now act provides for tho form
ation of twolve land banks. The
capital will be subscribed by tho na
tional government, if not taken
otherwise. (This raoroly Insures tho
starting of tho banks; a like provi
sion was inserted into tho fed
oral rcsorvo act.) Farmers desir
ing farm loans will form farm-loan
as8ociationsvWhich will borrow for
their mombersXfrom tho farm loan
bank, tho amount: of their loans. Tho
farm loan association must consist
of at loast ten mombers, who must
bo borrowers. The association wi
elect officers, pass on the security of
tho land offered, make appraisals and
inspections. Bach borrower will sub
scribe for stock in tho farm loan
bank to tho amount of G por cent of
his loan. This will not bo paid in
cash, but will bo added to tho amount
of his loan, and when tho loan is
paid off, the stock will be repurchased
from him.
Tho money tho farmer borrows
will at first bo supplied from the
capital stock of the farm loan banks.
Tho least amount to ono borrower
will be $100, tho greatest, $10,000.
As soon as tho farm loan bank makes
loans enough, it will Issue farm loan
bonds, secured by its own resources,
by tho mortgages it holds, and by a
further liability on the part of tho
borrowers. These bonds will bring
in tho capital necessary to make fur
thor loans. Tho loans will run from
flvo to forty years, and will be met by
payments at stated intervals, which
will include the interest, the expense
of administration and a percentage
of tho principal. It is probablo that
tho total payment will not exceed tho
interest payment now required in
most parts of tho country.
Tho farmer who borrows today
borrows for five years, and his whole
loan comes duo at once. Tho farmer
under tho now law will borrow for
forty years if ho so desires and
his loan will como duo in many
small installments. Tho farm loan
bonds will bo free of all taxes, just
as United States bonds are now. The
farmer-borrower will be, himself, an
owner of bank stock and a member
of a farm loan association, which he
will help conduct; ho will thus be
receiving a practical financial train
ing of great value, and will bo car
rying his sharo of responsibility
expressed in a direct liability for
farm loans made by his association
s4 ' ThatFriow
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1
Address Orders to THE COMMONER, Lincoln, Nebr.
San Diego Property
For Sale or Trade
I have three eligible residence lots in San
Diego, California, which I desire to sell. Or
will trade them for real estate of equal value
near Lincoln, Nebraska, Miami, Florida, or
Asheville, North Carolina.
For terms and price apply to
W. J. BRYAN, LINCOLN, NEBR.
7HO S4WWG VOTWNG f
Kansas City Post.
in his neighborhood. And tho in
vestor desiring to invest in farm
loans will no longer buy individual
mortgages in odd sums, taking, him
self, the chance of the security prov
ing sufficient. He will buy bonds se
cured by the capital stock of the
land banks, the farms mortgaged and
a definite stockholders liability be
side. These bondB will be free of
all taxes, which will make them de
sirable investments, and tfiey can be
bought in round sums say $100
each.
How many farmers in the United
States have worked too hard, seen
their wives breaking under the strain
of long hours and few conveniences,
kept the boys out of college and im
poverished their land, . in order to
meet a five-year mortgage drawing
high interest? How would those
farmers have regarded a proposition
to reduce the interest from one-third
to one-half, lengthen the period from
five years to 40, with the privilege of
paying out in less time, and pay the
principal by small installments in
stead of at the end of the term?
The rural credits act makes this
change.
There is nothing exclusive in the
new system. The states will still be
free to develop state rural credit
systems, as Missouri is now doing,
and the two will no more conflict
than our national banks and state
banks conflict in Missouri today.
St. Louis Republic.
"BACK TO THE FARM"
The man vho has made millions
and the man who is down and out
have a common vision of joy. It is
to go "back to the farm." But as a
rule, only the millionaire takes the
trip, says the Shreveport Times.
Just why the penniless man can
seldom succeed as an agriculturist
even by taking up government land
has been worked out by the New
York congestion committee. The in
formation appears in relation to the
Crosser colonization bill now before
congress. This bill is designed to
assist farmers and to protect them
from exploitation by land and money
sharks.
Speaking on this bill before the
house committee on labor, May, 18,
Benjamin G. Marsh, executive secre
tary of the New York congestion
committee, quoted statistics provided
by the Jewish immigration and in
dustrial aid society of New York:
"On the whole, we would not feel
warranted in advising any man to
buy a farm unless he had a minimum
capital of $1,000. Even then he will
need our assistance. Without it
$1,500 to $2,000 is little enough.
The same holds good even in home
steading on government laud where
tho land costs nothing."
In other words, it is a risk for a
man to undertake farming with a
mortgaged outfit.
But there is a more obscure cause
for the difficulties of the poor farm
er. Though little understood, it
reaches very far. It is inflated land
values, and the concentration of own
ership of the farm lands of the coun
try. A table compiled by the secretary
of agriculture on the, basis of figures
from the census of 1910 covers 878.
798.325 acres of farm land.
This area is alloted and held as
follows:
3.0 per cent in farms under 20
acres.
5.2 per cent in farms of 20 to 49
acres. f
11.7 per cent in farms of 50 to 99
acres.
53.G per ce-t In farms of 100 to
499 acres.
9.5 per cent in farms of 500 to 999
acres.
19.0 per cent in farms of 1,000
acres and over.
Landlordism, the curse of the old
world, is now in the making in this
country. The Crosser colonizataion
bill is one of our first attempts to
defeat it.
"Until we tax land values more
heavily and transfer taxes from
buildings and all other improve
ments to..Jand values, farming wiu
be increasingly unprofitable, saia
March fpphe house committee on
labor, recently. .
"The proposed rural credits plan,
insofar as fliey would lower f
rates to" fatfmers, would tend torn
flate lafltfTOJlues, but this danger w
also invented in the lands under tw
superVis-ioVdf the colonization board, t
by the provisions of the Crosser
bill."
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