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3 1 ,000 Farmers Are 



Refinanced in 1 5 Months 



,; By Walter L, Rusty President, 

 "•"'■' Federal Land Bank of St. Louis 



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URING tlie past 15 months, more 

 than 31,000 farmers in the St. 

 Louis farm credit district have 

 been able to refinance their farm mort- 

 gage loans with long-term, amortized 

 Federal land bank or commissioner's 

 loans. These new loans have prevented 

 foreclosures, reduced interest rates, and 

 granted the farmer a longer time in 

 which to work his way out of debt. 



The importance of the Federal Land 

 Bank as a financing agency was em- 

 phasized by passage of the Emergency 

 Farm Mortgage Act of 1933, at a time 

 when the farm mortgage situation was 

 relatively frozen. .:.■ ■■^-.-.A^^J/'r^^^^^' 



I For 16 years the Federal Land Bank 

 of St. Louis had been making long term, 

 amortized, farm mortage loans at low 

 rates of interest. But during that 16 

 year period, credit from other sources 

 was plentiful. The farmer, to obtain a 

 farm loan, did not have to leave his 

 barijlot. Money was pushed into his 

 hands. And why not? Land was sell- 

 ing at high prices and producing high 

 priced crops and livestock. ■ ; : ^" 





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^ii^ vv Land Drops Sharply ^ ^ ^ 



By 1933 this condition had changed. 

 Land prices had dropped 97 points since 

 1920, and the farmer was fortunate if 

 he got the cost of production from his 

 crops and livestock. Creditors were de- 

 manding that their money be paid at 

 once, /..v '•■..,,; ••:--:v;,:v; ■•; ■ .;;v--:::. ••;;■. 



The farmer, in searching for a straw 

 to hold to, turned to the Federal Land 

 Bank System, which, with the new idea 

 of amortized loans, had been going along, 

 year after year, gaining valuable ex- 

 perience. 



Congress saw the strategic position 

 held by the 12 land banks of the na- 

 tion. In these institutions rested the so- 

 lution of the problem of the foreclosure- 

 threatened, over-capitalized farmers. To 

 aid them still further, the Emergency 

 Farm Mortgage Act was passed. 



This Act, which received Executive 

 approval on May 12, 1933, permits the 

 land banks to make direct loans to bor- 

 rowers in areas not served by a na- 

 tional farm loan association. It grants 

 interest reductions to land bank bor- 

 rowers until 1938. It permits land bank 

 borrowers to postpone principal pay- 

 ments, and makes it possible for land 

 banks to grant extensions to worthy bor- 

 r<>^ers and to reamortize such extensions. 

 It also provided for the land bank as 

 agents of the Land Bank Commissioner 

 |4>make,]x)ans fo^.as much as 75 per cent 

 of the kpptliised value of the farm im- 



■■•/.■•■ •. "■ ' 



THE BOND COUNTY FARM BUREAU MAKES EFFECTIVE USE OF ITS WINDOW SPACE TO AD- 

 vertise for Greater Membership. ■^^•.•^.•••. •.;; v.-- \ '„■■'■ -■.■:' v^* •'• -/v. •■."••■ -^ ■ ..■ ■ 



provements and personal property mort- 

 gaged. Howevey, the farmer is required 

 to have a 25 per cent equity in his farm, 

 and a reasonable possibility of working 

 out of debt with normal prices and nor- 

 mal management. ^^^^^ - ; ,.; 



The extent to which economic condi- 

 tions and this legislation affected the 

 activity of the land banks is reflected in 

 the records of the Federal Land Bank of 

 St. Louis. f^y'^'-'^^^^^ 



On May i, 1933, after the Federal 

 Land Bank had been in operation for 16 

 years, the outstanding loans numbered 

 31,020 for $97,015,372.91. On July 21, 

 1934, less than 15 months after the 

 financing campaign got under way, the 

 Federal Land Bank on its own account 

 and as agent of the Land Bank Com- 

 missioner had closed 31,033 .new loans 

 for $92,902,400. ; 



•;:-f.'-\--^.-;i'-V-.100%. Growth . ^y ■■:■■■':■■.■ '■ 



In other words, a 16-year-old institu- 

 tion made a 100 per cent growth in but 

 15 months. In these figures can be found 

 evidence of the speed and efficiency with 

 which the Land Bank has met the de- 

 mands of financially distressed farmers 

 of Illinois, Missouri, and Arkansas. 



These 21,033 loans have stopped fore- 

 closure action in thousands of cases. One 

 farmer in discussing the Land Bank and 

 his loan said: . •; v 



"The Land Bank has meant to me 

 what a good father means to a 

 worthy son. 



"The party holding my mortgage 

 on my farm was overly anxious to 

 obtain the place for the outstanding 

 indebtedness and was looking for- 

 ward to immediate foreclosure and 

 possession, knowing full well that 

 there was no place in which I could 



■..■•, :'-i.rt; 



fQ(L;{r03ER. 1»34 



seek relief through organizations 

 and individuals. ; S V^^^f ■ 



. . "But I fooled him. My land bank > ; 

 loan has given me a new interest in 

 life. This isn't such a tough old world 

 ^ ■• after all." ....:;■...;. ■ ■'.■^::'-...- -■-:.:...:::■[ 



^; r ; ■ Cut Interest Rates />/ 



Land banks and commissioner's loans 

 have reduced interest rates. On com- 

 missioner's loians the farmers pay 5 per 

 cent interest while on land bank loans 

 made through national farm loan as- 

 sociations the interest rate is only 4% 

 per cent until 1938. These amortized 

 loans extend over a long period of time, 

 ranging from 13 to 36 years. Each year 

 a portion of the principal is paid to- 

 gether with interest on the unpaid bal- 

 ance. In many cases, these payments, in- 

 cluding both a portion of the principal 

 and interest, are no more than the farm- 

 er had been paying on interest alone. 



One happy farmer felt impelled to 

 write the Land Bank a letter of thanks 

 for his commissioner's loan. He wrote: 

 - "For a number of years I have 

 \ been paying 10 per cent interest on 

 my loan and let me tell you it is 

 such a pleasure to get out from un- 

 der 10 per cent interest that I must 

 write you a letter of appreciation. 

 Words cannot express how glad I am 

 to be given this easy plan of paying 

 my home out of debt with only 5 

 per cent interest." 



Although the Federal Land Bank of 

 St. -Louis has loaned more than $92,- 

 000,000 in less thap 15 months, the total 

 over-head indebtedness of the farmers 

 of Illinois, Missouri, and Arkansas has 

 not been greatly increased by this re- 

 financing program^ ^v ' 

 Records reveal that 91 per cent of the 



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