RURAL CREDITS 



5109 



RURAL CREDITS 



FEDERAL LAND BANK DISTRICTS 



The city shown in each district is the location of a land bank and a farm loan board ; these have 

 jurisdiction over all rural credits In the district. 



vidual, firm or corporation, or by the govern- 

 ment of any state or of the United States. 

 Stock held by national farm loan associations 

 cannot be transferred nor assigned for security. 



National Farm Loan Associations. The Fed- 

 eral land banks make their loans through 

 national farm loan associations, which are or- 

 ganizations of persons who wish to borrow 

 money on land, giving a first mortgage for 

 security. Each association chooses a board of 

 directors, and they select a secretary-treasurer, 

 who is the executive officer of the association. 

 I! duties consist in collecting and receipting 

 for all money received, such as interest, partial 

 payments on loans, and principal, and forward- 

 ing the same to the Federal land bank in th* 

 district in which the association is located. He 

 is also required to pay to the borrower the 

 money loaned him by the Federal land bank. 



The stock of these associations is divided into 

 shares of five dollars each, and each applicant 

 for a loan is required to subscribe for one share 

 for every $100 or major part thereof which he 

 borrows, paying cash for his stock when he 

 applies for his loan. The stock is held as se- 

 curity for thr payment of the loan, and is 

 d and paid in full when all payments have 



been met by the borrower. Each national farm 

 loan association must have at least ten mem- 

 bers, and it cannot begin business until the 

 loans applied for amount to at least $20,000. 



How to Secure a Loan. Any farmer desiring 

 to borrow money under this law should take 

 the following steps: 



1. Join the national farm loan association 

 nearest to the locality in which he lives or in 

 which his land is located, paying in five dollars 

 for one of its shares for every $100 he wishes to 

 borrow. 



2. Make application to the association for the 

 loan, giving his personal note therefor, secured 

 by a first mortgage on his farm. 



3. The land is then examined by authorized 

 members of the association and an appraiser of 

 the Federal land bank. If the application in 

 approved the bank forwards the money to th< 

 secretary-treasurer of the association, who payp 

 It over to the farmer. No commission, brokerage 



rake-off" Is charged the farmer, and the rate 

 <>r interest cannot exceed six per cent. 



Advantages. The law confers the following 

 advantages on the farmer: 



i It gives him the privilege of borrowing 

 money to the amount of his security without hav- 

 ing to pay high commissions and a high rate of 



it provides for long-time loans not lew 

 than five nor more than forty years on a plan 



