1916J EDITORIAL. 107 



scribes for stock in the land bank itself and receives dividends ac- 

 cordingly. 



Another alternative is provided in the joint-stock land banks. 

 These banks are to possess some powers similar to those of the Fed- 

 eral land banks, but differ from them in a number of ways. They 

 must have a subscribed capital of at least $250,000, none of which 

 comes from Government funds. These banks are allowed to make 

 loans on first mortgages on farm lands, and to issue a distinctive 

 series of farm loan bonds to an amount not exceeding fifteen times 

 their capital and surplus. Their interest rate can not exceed by more 

 than one per cent the rate charged on their land bonds, or a total of 

 6 per cent, and any commissions collected must have the approval 

 of the farm loan board. In making the loans the joint-stock land 

 banks, however, need not restrict the purposes for which the loans 

 are to be used or the amount to an individual, or require the borrower 

 to be personally engaged in the cultivation of the land mortgaged. 

 The banks are also noncooperative, no stock subscriptions being re- 

 quired of borrowers and any profits being apportioned among the 

 shareholders alone. 



The mortgages received and the bonds issued under the authority 

 of the act, whether by the Federal land banks or the joint-stock 

 banks, are specifically exempted from Federal, State, and local taxa- 

 tion. The bonds are also made legal investments for all fiduciary 

 and trust funds, and may be bought and sold by member banks of 

 the Federal reserve system. It is expected that, because of these 

 advantages and their standardized character, these securities will 

 prove attractive investments and thus provide the bulk of the funds 

 to be loaned under the system. 



The new act may well lead to an expansion of the influence of 

 the agricultural colleges and experiment stations, and constitute an 

 aid in putting into effect better methods and practices. It should 

 make it practicable for a larger proportion of college graduates 

 to engage in farming. It should also make the work of the county 

 agents more effective, and give an increased impetus to the work 

 of investigation which aims at improvements to be inaugurated by 

 the individual farmer. At all events, it is a response to a widespread 

 demand arising from what is believed to be a necessity, and a 

 logical step toward better agriculture and better farming conditions. 

 Operations under its provisions will, therefore, be awaited with 

 keen and widespread interest. 

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