462 FARM FINANCE 



farm mortgages, which are a first lien and may not be in 

 excess of 50 per cent of the value of the property. The 

 term of the farm loans ranges from five to thirty-five 

 years. New York state also has a law with the same gen- 

 eral features. 



In order to meet the need for rural credits more effec- 

 tively and to provide a more general scheme for their 

 organization and supervision, it lias been thought that 

 Congress was in a better position to cope with the problem 

 than the several states individually. Accordingly there 

 was established in July, 1916, at Washington a new Fed- 

 eral Land Bank System. 



332. Federal Land Banks. The federal land bank bill 

 for rural credits is the result of considerable agitation and 

 study covering more than a decade. Congress sent a 

 commission abroad to study the problem. The need of 

 better financial facilities for the open country was clearly 

 recognized by all parties alike. Little opposition to it in 

 Congress was encountered. The provisions of the new 

 law are generally held to be sound and well suited to 

 American farm life. 



The federal land bank law follows in a general way the 

 main features of the recent Federal Reserve Banking Act, 

 a companion measure. It provides for a Federal Farm 

 Loan Board, consisting of five members, one of whom is 

 the Secretary of the Treasury. The continental United 

 States is divided into twelve districts, in each of which 

 there is to be established a land bank with a capital stock 

 of not less than $750,000. The capital stock of these 

 district banks may be subscribed by any one. However, 

 5 per cent of each loan made to farmers must be deposited 

 in the farm loan association for the land bank stock of its 

 district. 



The farm loan associations reach the farm directly. 



