The  U.  S.  Farm  Loan  Act; 
Part  I. 
NEW  RURAL  CREDITS  LEGISLATION.— Pres¬ 
ident  Wilson  signed  the  rural  credits  law  on  July  17. 
This  is  known  as  the  Farm  Loan  Act.  since  it  is  a 
step  toward  the  plan  of  loaning  money  to  farmers  with 
the  backing  and  supervision  of  the  Federal  Government. 
The  purpose  of  the  net  is  to  promote  agricultural  pros¬ 
perity  by  enabling  farmers  to  borrow  money  on  farm 
mortgage  security  for  a  long  period  of  time  and  a  rea¬ 
sonable  rate  of  interest.  There  are  two  systems  pro¬ 
vided  whirh  we  may  take  up  in  order. 
FEDERAL  LAND  RANK  SYSTEM. — The  first,  is 
the  Federal  Land  Rank  system.  There  are  to  be  12  of 
these  banks  located  in  12  farm  loan  districts.  Each  is 
to  contain  a  Federal  Land  Bank  with  a  subscribed  cap¬ 
ital  stock  of  not  less  than  $750,000 — each  share  $5. 
Each  of  these  Federal  banks  may  establish  branches  in 
its  district  for  doing  business.  These  banks  arc  to  bo 
under  the  general  supervision  of  a  Federal  Farm  Loan 
Board.  This  Board  is  composed  of  the  Secretary  of 
the  Treasury  and  four  members  to  be  appointed  by  the 
President  of  the  United  States.  In  order  to  attract 
money  into  this  field  of  business,  the  law  provides  a 
method  whereby  those  who  have  money  to  lend  can 
find  a  safe  investment  in  the  form  of  debentures  or 
bonds,  which  arc  to  he  issued  by  the  banks  ami  based 
on  the  security  of  the  farm  mortgages.  There  are  to  be 
local  farm  loan  associations  which  are  composed  of  bor¬ 
rowers  or  those  who  desire  to  borrow  money  on  farm 
property.  These  local  associations  are  shareholders  in 
the  bank  and  thus  the  borrowers  who  are  members 
will  share  in  the  bank  profit. 
WHERE  THE  MONEY  COMES  FROM.— The 
money  for  the  loans  is  to  come  partly  from  the  capital 
of  the  bank  and  partly  from  the  sale  by  the  bank  of 
bonds  which  are  secured  by  first  mortgages  on  farm 
land.  The  rate  of  interest,  shall  not  exceed  six  per 
cent,  per  annum  or  one  per  cent,  more  than  the  loan. 
Thus  if  a  bank  borrows  money  at  only  four  per  cent, 
on  an  issue  of  bonds  it.  cannot  charge  more  than  five 
per  cent,  for  the  next  farm  loans  that  it.  makes.  Out 
of  this  margin,  not  to  exceed  one  per  cent.,  together 
with  such  amounts  as  it  can  earn  on  paid  up  capital, 
the  bank  must  set  aside  a  certain  reserve  and  meet 
all  its  expenses. 
Within  50  days  after  the  capital  stock  of  the  hank  is 
offered  for  sale  it  may  be  purchased  at  par  by  anyone. 
After  that  the  stock  remaining  unsold  shall  he  bought 
by  the  Secretary  of  the  Treasury  for  the  United  States. 
The  Government,  however,  shall  not  receive  any  divi¬ 
dends  on  this  stock.  The  provision  for  Federal  pur¬ 
chase  is  evidently  designed  to  make  sure  that  the  bank 
has  proper  capital  from  the  start.  The  intention  is 
that  ultimately  all  stock  in  the  bank  shall  be  owned  by 
the  association  of  borrowers. 
CONDITIONS  FOR  BORROWING.— Ten  or 
more  persons  who  own  and  cultivate  farm  land 
would  be  suitable  for  security  ns  a  mortgage  loan, 
or  those  who  are  about  to  own  and  cultivate,  such  land 
may  form  a  loan  association  anywhere  iu  the  coun¬ 
try.  The  aggregate  of  the  loan  desired  by  the  member¬ 
ship  must  be  at  least.  $20,000.  In  order  to  join  or  make 
a  loan  each  member  must  take  stock  in  this  associa¬ 
tion  to  the  amount  of  five  per  cent,  of  the  amount  he 
wishes  to  borrow.  The  association  holds  this  stock  in 
trust  as  security.  When  the  association  subscribes  to 
the  Land  Bank  for  money,  it.  must  also  subscribe  for 
stock  in  the  hank  t.o  the  extent  of  five  per  cent,  of  the 
sum  wanted.  This  stock  is  held  in  trust  by  th«  bank 
in  like  manner  for  security.  If  a  prospective  borrow¬ 
er  has  no  cash  with  which  to  pay  for  his  association 
stock  he  may  borrow  the  price  of  that  stock  as  a  part 
of  the  loan  of  his  farm  land.  Thus  every  borrower  in 
the  local  association  must  be  a  stockholder  in  it.  and 
every  association  is  a  stockholder  in  the  district  hank. 
Each  stockholder  in  an  association  is  liable  for  the 
acts  of  that  association  up  to  twice  the  amount  of  its 
stock. 
INVESTIGATION  OF  THE  BORROWER. — In 
order  to  obtain  a  loan  a  member  of  the  local  associa¬ 
tion  must  fill  out  an  application  blank  which  is  sup¬ 
plied  by  the  Federal  Loan  Board.  This  application  is 
then  referred  to  a  Committee  of  the  Association  and 
the  property  offered  as  security  is  appraised  as  it  would 
he  iu  one  of  our  building  and  loan  associations.  If 
the  application  is  approved  by  this  committee,  it  is  then 
forwarded  to  the  Federal  I, and  Bank  and  there  it  must 
he  investigated  and  reported  on  by  a  salaried  appraiser 
of  that  bank  before  the  loan  is  granted.  This  apprais¬ 
er  is  required  to  investigate  the  solvency  and  the  char¬ 
acter  of  this  borrower,  .as  well  as  the  value  of  his  land. 
'When  the  loan  is  granted  the  amount  is  forwarded  to 
the  borrower  through  the  loan  association.  Thus  it 
will  be  seen  that  in  order  to  obtain  a  loan  through  these 
hanks  the  horrower  must  stand  even  a  closer  examina¬ 
tion  than  he  would  when  obtaining  money  from  a  pri¬ 
vate  individual  or  from  an  ordinary  bank. 
WHAT  THE  LOAN  MUST  BE  USED  FOR.— In 
order  to  obtain  a  loan  certain  conditions  must  be  ac¬ 
cepted.  The  money  must  be  used  for  the  purchase  of 
land  for  agricultural  uses  or  for  the  purchase  of  equip¬ 
ment,  fertilizers,  and  live  stock  necessary  for  proper 
and  reasonable  operation.  The  term  “equipment”  is 
to  he  defined  by  the  Federal  Farm  Loan  Board.  An¬ 
other  condition  is  that,  the  money  must  be  used  to  pro¬ 
vide  buildings  and  lor  the  improvement  of  farm  land. 
It  may  also  he  used  to  liquidate  indebtedness  of  the 
owner  of  the  land  mortgage,  that,  is  a  farmer  may  now 
he  paying  a  high  rate  of  interest,  on  his  mortgage.  lie 
may  borrow  money  from  these  land  banks  in  order 
to  pay  off  this  existing  mortgage  and  thus  put  a  new 
<  ne  on  his  property  at  a  lower  rate  of  interest.  Loans 
are  only  made  on  first  mortgages  for  farm  lands,  not 
on  second  mortgages  or  upon  town  or  city  property. 
The  mortgages  are  granted  only  to  those  who  cultivate 
farm  land  or  who  are  about  to  own  and  cultivate  such 
land.  This  evidently  would  cut.  out.  the  tenant  or  the 
man  who  is  not  at  present  a  land  owner  unless  he 
could  show  that  he  Was  on  the  point  of  buying  a 
farm  at  a  fair  figure  arid  one  good  enough  to  serve 
as  full  security.  No  one  can  borrow  money  from 
these  banks  except  for  the  purposes  stated  above.  Any¬ 
one  who  borrows  anil  does  riot  use  the  money  for  these 
purposes,  is  liable  to 'have  the  loan  reduced  or  recalled. 
BORROWING  LIMITS  AND  PAYMENTS.— No  in¬ 
dividual  can  borrow  more  than  $100,000  or  less  than 
and  no  loan  is  made  for  more  than  50  per 
cent  of  the  value  of  the  laud  mortgaged,  and  20  per 
cent,  of  the  value  of  permanent  insured  improvements. 
The  loan  must  run  for  not.  less  than  five  and  not  more 
than  40  years.  Every  mortgage  must  provide  for  the 
repayment  of  the  loan  under  a  plan  of  amortization. 
This  means  a  fixed  number  of  annual  or  semi-annual 
payments  sufficient  to  meet  all  interests  and  pay  oil  the 
debt  in  full.  The  bank  of  course  is  given  powers  to 
RURAL.  NEW-YORKER 
protect  itself  in  case  of  default  by  recalling  the  loan 
or  taking  over  necessary  action.  The  Federal  Land 
Banks  are  prohibited  from  charging,  in  connection  with 
making  the  loan,  any  fees  or  commissions  which  are  not 
authorized  by  the  Farm  Loan  Board.  The  authorized 
fees  need  not  be  paid  in  advance  but  may  he  made  part 
of  the  loan.  A  further  statement  of  the  proposed  work¬ 
ings  of  these  banks  will  be  given  next  week. 
120  lbs. 
540  lbs. 
1035 
.24 
MEATS. 
The  Outlook  for  Crops 
The  crop  reports  up  to  date  show  a  gain  in  a  few 
crops,  and  a  decided  loss  in  others.  The  wheat  crop 
will  evidently  be  short  of  Inst  year.  Wiutre  wheat 
for  1.915  was  055.045,000,  and  of  Spring  wheat  356,- 
460,000.  The  estimated  crop  for  this  year  in  sight  on 
July  1  was  489.0*10, 000  for  Winter  wheat,  and  269,- 
517,000  for  Spring  wheat.  The  stocks  on  hand  for 
July  1  were  somewhat,  larger  than  those  a  year  ago, 
hut  not.  enough  to  make  up  the  difference.  The  corn 
crop  will  also  be  short,  the  condition  on  July  1  being 
82  as  compared  with  84  a  year  ago.  Should  this  con¬ 
dition  remain,  this  will  mean  a  loss  of  about.  250,000,- 
000  bushels.  The  chances  are  that,  the  weather*  will 
improve  somewhat,  .so  that  corn  conditions  will  im¬ 
prove.  Oats  promise  to  he  a  little  heavier  than  last 
year  on  the  whole,  and  the  same  is  true  of  barley,  al¬ 
though  there  w  ill  not  be  enough  of  these  grains  grown 
to  make  much  difference  in  the  total,  liny  as  a  whole 
is  considerably  alicad  of  last  year,  the  yield  being  heav¬ 
ier  on  account  of  the  wet  weather.  The  difficulty  in 
curing  the  hay,  however,  is  such  that  the  total  crop  of 
salable  hay  for  the  first  cutting  will  not  be  much  above 
that  of  last  year.  As  a  rule  rye  does  not  cut  much 
figure  in  the  country  total  food  supply.  The  crop  this 
year  is  about  the  same  as  last.  The  condition  of  tobacco 
is  a  little  above  that  of  last  year,  and  the  estimated 
yield  is  about  150.000.000  pounds  heavier. 
Potatoes  vary  greatly,  and  it  is  of  course  impossible 
at  this  time  to  make  any  fair  estimate  of  the.  late  crop, 
since  much  of  it  in  Northern  latitudes  has  only  been 
recently  planted,  and  has  not  come  on  far  enough  to 
make  a  fair  showing.  Taken  ns  a  whole,  the  condi¬ 
tion  of  potatoes  is  a  trifle  ahead  of  last  year  at  this 
time,  with  an  estimated  increase  of  8,000,090  to  10,- 
000,000  bushels.  This  of  course  is  such  a  narrow  mar¬ 
gin  in  this  early  season  that  no  definite  statement  can 
be  given.  The  early  crop  from  the  South  now  being 
harvested  has  run  Under  last  year’s  crop,  in  some  cases 
considerably  so,  and  prices  have  held  well.  The  crop 
in  New  Jersey  will  be  short  of  last  year.  The  Penn¬ 
sylvania  crop  promises  to  he  a  little  heavier,  as  is  the 
case  in  most  of  New  England.  The  Now  York  crop 
promises  to  be  somewhat  better  than  last  year.  There 
can  he  no  doubt,  however,  at.  this  time  that  the  grain 
crop  taken  as  n  whole  will  be  short  of  last  year,  and 
the  salable  hay  crop  about  the  same.  Tn  New  York 
State  alone  at.  this  date  a  short  crop  of  wheat  is  in- 
dieated,  corn  in  particular,  since  this  grain  at  this  time 
promises  but.  a  little  more  than  half  of  last  year’s  yield. 
A  large  quantity  of  this,  however,  will  go  into  the  silo, 
as  is  usual.  The  wheat,  crop  promises  a  loss  of  over 
2.000,000  bushels  in  New  York  alone.  There  will  be  a 
loss  in  barley,  with  rye  about  the  same.  The  estimated 
tobacco  crop  at  this  date  is  about  1,000.000  pounds 
short  of  last  year.  Potatoes,  hay  and  pasture  are 
better  than  last  year.  There  is  an  estimated  increase 
of  from  5.000.000  to  4.000.000  bushels  of  potatoes. 
Peaches  will  be  shorter  than  lust  year,  and  apples  on 
the  whole  for  high  grade  fruiting  will  run  about  the 
same.  There  will  be  a  heavier  yield  than  last  year,  but 
the  rainy  weather  in  t  erf  erred  considerably  with  spray¬ 
ing  conditions,  and  will  have  an  effect  in  reducing  the 
crop  of  high  grade  fruit. 
1  dressed  calf.  79  lbs . 
1  dressed  calf.  94  lbs . 
1  dressed  calf,  170  lbs . 
. $3.18 
. ‘  .17 
.  14 
56  lbs.  lamb  . 
.  12 
VEGETABLES. 
3  baskets  peas  . 
2  baskets  peas  . 
5  baskets  peas  . 
2  baskets  peas  . 
. $1.06  2-3 
.  1.12% 
.  1.00 
1  00 
4  bugs  peas  . . . . 
. ;  LOO 
16  baskets  peas  . 
.  2.00 
3  bags  pens  . 
...  1 50 
2  hags  peas  . 
.  125 
2  bags  peas  . 
.  1.00 
1  basket  peas  . 
60 
10  baskets  peas  . 
.  1.25 
4  boxes  cucumbers  . 
. 75 
1  box  cucumbers  . 
. 90 
13  baskets  cucumbers  . !  .  .  . 
. 65 
5  baskets  cucumbers  . 
. 2.8 
5  baskets  cucumbers  . 
. 35 
2  crates  tomatoes  . 
.  1.50 
10  crates  tomatoes  . 
.  70 
10  crates  tomatoes  . 
.  LOO 
2  boxes  corn  . 
.  1.50 
23  baskets  green  beans  ... 
. . 20 
12  baskets  green  beans  . . 
. 25 
2  baskets  beans  . 
75 
3  baskets  beans  . 
. 50 
1  bag  beans  . 
85 
4  baskets  beans  . 
.  L50 
2  baskets  beans  . 
.  1.25 
2  baskets  beans  . 
.  LOO 
1  bag  beans  . 
9  25 
5  baskets  beans  . 
...  1 25 
13  baskets  beans  . 
1  00 
7  baskets  beans  . 
.  1.00 
17  baskets  beans  for  . 
. 15.00 
1  crate  peppers  . 
. 60 
1  crate  peppers  . 
90 
2  crates  peppers  . 
.  75 
2  crates  peppers  . 
.  75 
1  OK 
9  baskets  peppers  . 
•••••••••••  JL.-rft) 
.  1.00 
4  barrels  potatoes  . 
. 2.50 
3  barrels  potatoes  . 
9  9^ 
8  barrels  potatoes  . 
. ‘  2  50 
2  barrels  potatoes  . 
.  2.75 
7  barrels  potatoes  . 
.  1  75 
3  baskets  onions  . 
.  1.66  2-3 
3  baskets  onions  . 
.  1.25 
Cl 
6-1 0 
128 
06 
508 
M0 
128 
qts. 
qts. 
qts. 
qts. 
qts. 
qts. 
qts. 
strawberries 
strawberries 
strawberries 
Strawberries 
strawberries 
strawberries 
strawberries 
FRUITS. 
1600  qts. 
Notes  from  Department  of  Foods  and 
Markets 
204  Franklin  St.,  New  York  City 
'New  apples  are  selling  from  50c  t<>  $1.50  per  basket, 
a  few*  fancy,  hand-picked,  selling  as  high  as  $2.  South¬ 
ern  peaches  are  arriving  in  substantial  quantities  and 
with  a  good  demand  for  fancy  stock,  selling  from  $1 
to  $2.25  per  carrier.  The  sweet  cherries  are  practically 
cleaned  up.  The  sour  cherries  arriving  now  are  sell¬ 
ing  from  15c  to  30c  per  seven-pouml  basket;  in  quarts 
4c  to  6c  per  quart. 
The  Health  inspectors  embargoed  large  quantities 
of  raspberries,  blackberries  and  a  few  currants.  The 
bitter  mould  on  the  raspberries  from  the  up-river  sec¬ 
tion  taints  the  berry  to  sueh  an  extent  that  the  can- 
ners  cannot  use  them.  Arrivals  of  currants  continue 
heavy,  si  lling  4c  to  Sc  per  quart.  Fanners  cleaned  up 
several  houses  along  the  street  on  the  basis  of  from  75c 
per  crate  to  4c  per  quart. 
The  receipts  of  nearby  hennery  eggs  were  light  and 
show  rapid  deterioration  of  quality,  due  to  the  hot 
weather.  However,  the  best  nearby  hennery  whites 
sold  as  high  as  MMc  late  in  the  week.  Express  ship¬ 
ments  of  broilers  are  coming  in  quite  heavy  and  prices 
declining.  Leghorns  sold  21e  and  25c.  Fancy  heavy 
colored  sold  as  high  as  28e.  Consignments  of  State 
peas  are.  arriving  in  moderate  quantities  and  selling 
from  85c  to  $1.25  per  basket.  Buffalo  peas  in  bushel 
hampers  selling  at  from  $1.25  to  $1.75,  according  to 
quality.  Receipts  of  potatoes  from  Maryland,  Dela¬ 
ware  and  Virginia  were  heavy.  Good  demand  from 
out  of  town  resorts :  considerable  quantities  exported 
to  the  West  Indies.  Prices  ruled  $2  to  $2.50  per  barrel. 
The  range  of  prices  in  the  Department  stiles  last  week 
were  as  follows: 
Summary  of  sales  of  miscellaneous  farm  products  dur¬ 
ing  the  week  ending  July  20th,  1916: 
EGGS. 
10 
5 
62 
20 
6 
107 
6 
55 
2 
21 
21 
40 
6 
22 
89 
100 
9 
10 
30 
49 
36 
24 
•> 
25 
7 
77 
15 
12 
100 
15 
64 
128 
16 
04 
SO 
56 
49 
38 
18 
10 
15 
50 
20 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
baskets 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  - 
cherries  - 
Cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  • 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  - 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  . 
cherries  - 
cherries  . 
37% 
38 
oases 
oases 
.  31 
21  baskets  cherries  . 
32  baskets  cherries  . 
'.>6 
Qft 
1 
19 
case 
. 29% 
90 
22  baskets  cherries  . 
O 
cases 
. 28% 
24  baskets  cherries  . 
44% 
9 
69 
9 
cases 
cases 
07 
25  baskets  cherries  . 
47  baskets  cherries  for . 
oases 
oases 
. 26% 
.  26 
4 
1936  baskets. 
8 
O 
M 
O 
cases 
eases 
coses 
.  23 
2  boxes  cherries  . 
6  boxes  cherries  . 
1 
case 
$0.10 
.09 
.08 
.0714 
.07 
.06 
.04 
.69 
.50 
.50 
.35 
.35 
.35 
.35 
.35 
.35 
.30 
.30 
.30 
•321,4 
.30 
.30 
•27% 
.27  - 
.26 
.26 
.25 
.25 
.25 
96 
.z:> 
.25 
.25 
.24 
.23 
.22  % 
'.22  % 
.22% 
.22% 
.22% 
.22% 
22 
.23 
.20 
.20 
.20 
.18 
.18 
.IS 
.18 
.17% 
•17% 
-17% 
.15 
.15 
.15 
6.40 
9.50 
1.00 
1.25 
266  cases. 
BUTTER. 
55 
224 
Its. 
lbs. 
150  lbs. 
.$0.26 
.  .25% 
.  .25 
32  qts.  cherries  . 
.”>2  qts.  cherries  . 
32  qts.  cherries . 
57  qts.  cherries  . 
(Continued  on  page  1043.) 
.12 
.11 
.10 
.07% 
