BENEFITS OF FEDERAL FARM LOAN SYSTEM 481 



farm, searching and recording a title, making out papers, and 

 other incidental costs of procuring a mortgage loan are only 

 what they actually cost the land bank making the loan; and, 

 lastly, the farmer has an easy method of repaying his loan by 

 means of small annual or semi-annual installments. In general, 

 these are the most important benefits to farmers who mortgage 

 their farms under the Federal farm loan system. 



The method of repaying a loan is unique. It is called 

 *' amortization'^ — that is, the debt is paid off a little each year. 

 This plan works wonders for the farmer who is in debt. It 

 relieves his mind, for the fear of foreclosure does not haunt him ; 

 and it lightens the drain on his purse, for it reduces the amount 

 of interest he has to pay. This benefit alone is worth all the cost 

 of establishing this new system of farm mortgage credit. 



Three methods of borrowing money. — The law provides three 

 ways of enabling a farmer to get a loan : 



1. If a farmer wants to borrow money from a Federal land 

 bank, he must do so either by joining a national farm loan asso- 

 ciation or through an agent. These associations are organized 

 with not less than ten members and they operate in a limited 

 territory designated by their charter which is granted by the 

 Federal Farm Loan Board. The limits of loans that can be 

 borrowed through an association are from $100 to $10,000. Up 

 to October 1, 1919, there had been 3,953 national farm loan 

 associations organized in the United States and thev had made 

 loans to 100,412 farmers to the amount of $261,175,346. 



2. In some localities where associations are not organized, the 

 Federal land banks may appoint agents through which loans can 

 be made to individual farmers. An agent must be a State- 

 chartered bank, trust company, mortgage company, or savings 

 bank. Up to the present time only the Federal Land Bank of 

 St. Paul has made loans to farmers through agents. These 

 agents make loans in the district which includes the States of 

 Michigan, AYisconsin, Minnesota and North Dakota. 



3. If a farmer prefers he may procure a loan of a joint-stock 

 land bank. LTp to October 1, 1919, this class of land bank had 

 made loans to farmers to the amount of $41,787,360. The limits 

 of loans made by these banks range from $100 to $50,000. 



There are twelve Federal land banks and twenty-seven joint- 

 stock land banks in operation in different parts of the United 

 States. At the rate these banks are making loans it will not be 

 many years before their benefits will be extended to farmers all 

 over this country. 



