76 INFORMATION RELATING TO CREDIT 



Officials of the Farm lyoan Boards announce that before the end 

 of 1916 more than 50,000 farmers had applied for mortgage loans, of which 

 the approximate aggregate amount was S 150,000,000 or more than 

 seventeen times the sum which would be immediately available for loans 

 when the twelve farm loan banks were organized. 



Most of the applications came from the south and west, 2,000 of them 

 from Iowa alone. 



It was expected that almost immediately after their organization the 

 banks would find it necessary to issue bonds virtually for their entire capi- 

 tal stock, in order to meet the demands of borrowers. 



2.^THE SUBSCRIPTION OF THE CAPITAIv OF THE FEDERAL LAND BANKS. — 



The Economic World, New York, 10 March 1917. 



In accordance with the terms of the Federal Farm Loan Act subscrip- 

 tion books were opened to the public to the capital stock of the Federal 

 Land Banks, which are to represent in the new Federal Farm Loan System 

 that for which the Federal Reser^^e Banks stand in the Federal Reserve 

 System. The fact that the banks were unlikely to pay an}- dividends on 

 this stock during the first year and that it will ultimately be retired at par 

 naturally made it unattractive to investors. Subsciiption in none of the 

 twelve districts nearly reached §750,000, the minimum issue of capital 

 stock of each bank under the terms of the Act. 



The total sum subscribed was onl}- S 120,095, distributed as follows : 

 Springfield, Mass.. § 10,275 '> Baltimore, Md., $9,780; Columbia, S. C, S410; 

 Louisville, Ky., $7,735; New Orleans, La., $4,570; St. Louis, Mo., 

 $ 7,925 ; St. Paul, Minn., $5,360; Omaha, Neb., | 41,735 ; Wichita, Kan., 

 $ 6,335 ; Houston, Tex., $ 14,715 ; Berkeley, Cal., $ 6,110; Spokane, Wash., 



S 5MS- 



The Treasur}^ Department has therefore been obliged to subscribe no 

 less than $8,879,905 of the capital stock of the twelve Land Banks. It 

 is of course expected that the stock now subscribed for will be gradually 

 retired, through the operation of the provision of the Act which requires the 

 Farm Loan Associations — that is in the last resort the borrowing farmers 

 themselves — to subscribe for stock of the banks to the extent of 5 per 

 cent, of the amount they apply for as loans. 



The fact that legislation is now pending which will make farm loan 

 bonds legal investments for trust fxmds and the funds of savings banks and 

 insurance companies in most States in which they are not such already, 

 should insure for them a ready market at a satisfactory' rate of interest. 



