50 INFORMATION RELATING TO CREDIT 



was founded in virtue of tne federal law of 17 Julj" 1916 on agricultural 

 credit, and within six months it issued and sold 81,000,000 worth of bonds 

 based on mortgages which it lield as security for loans to farmers of the 

 vStates named. 



It also has on file fully examined applications for additional loans 

 amounting 83,000,000, and applications not yet fully examined for about 

 810,000,000. The manager believes that the bank's loans to farmers in 

 the district will aggregate 840,000,000 in the course of a few years. 



Charts showing the productivity of the land in every county of the 

 district and the general characteristics of the soil have been prepared. From 

 these the bank's officials can obtain information as to crops, live stock, 

 dairy production, the value of farm improvements, schools, churches, roads. 



In order to teach farmers their own needs and opportunities the bank 

 has decided to form an educational department. The hope is that such an 

 organization will be perfected as will gi\'e to every borrower the practical 

 help needed to make his farming methods and the management of his farm 

 thoroughly efficient. 



The methods followed in granting loans are themselves as educational 

 as they are practical, a fact made clear by the following example. An Ar- 

 kansas farmer applied to the Federal Bank of St. Louis for a loan of Siooo, 

 of which half was to build a barn and half .pay for tilling. The bank sent 

 an expert to appraise and survey the farm, and shortly afterwards the appli- 

 cant received from the bank a letter which was substantialh' as follows : 



" Our survey of your farm indicates that it would not be to your best 

 interest to lend you $500 to build a barn. Your land is worn out. You are 

 not producing enough to fill the barn you have. Our report shows that 

 3'ou need fertilizers and drainage. We are willing to lend you .8500 to 

 buy phosphates or limestone to build up your land and 8500 for tilling. 

 We believe that you can use 81,000 profitably in that way and double the 

 yield of 3^our farm. We have therefore approved of your application for 

 the loan provided you use the money as we ha^'e suggested. When a'ou 

 put your land in condition to produce what we think it is capable of produ- 

 cing we shall be glad to consider 3'our application for additional money to 

 build a barn ". 



Thus the bank extends practical as well as financial help to the farmers 

 of the St. Louis districts, and the reports of the bank's " field men " show 

 that the farmers lack practical methods as much as mone}^ In particular 

 this fact is proved by reports from some parts of Arkansas and Southern 

 Missouri, which speak of exhaustion of land due to no rotation of crops 

 and to a lack of proper fertilizers, of mere sheds serving as barns, of houses 

 hardly fit for habitation, and of neighbourhoods which have unimproved 

 roads and inadequate schools and churches. In many cases the bank has 

 recommended that applicants for loans build suitable houses instead of 

 using the monev thev borrow to buv live stock or clear additional land. 



