NEW FEDERAL LOAN purposes specified in the mortgage the amount of money available ernment does not lend them any are liable to have their for loans on farm mortgages. financial assistance. ACT, ITS MEANING loans reduced or recalled. The To make these bonds attractive The joint-stock land bank is Penny Wise and Pound Foolish secretary-treasurer of each association to investors, the bonds, together free from many of the conditions is required to report with te mortgages upon imposed on the Federal land any diversion of borrowed money which they are based, are exempted banks. Subject to the 50 and 20 (Continued from Page I.) The cost of living* makes every woman from the purposes stated in the from Federal, state, municipal per cent value limitation and the mortgages. look to see where she can save money, and local taxation, and limitation as to territory, the stock at par to these associations. No individual can borrow are made legal investments for joint-stock land bank may lend which, of course, is sensible and proper if Farm Loan Associations' more than $10,000 or less than fiduciary officers. more than $10,000 to a single individual, not carried too far. The act provides for the creation $100. Federal land banks also are exempt and it is not restricted of local national farm loan No loan may be made for more from taxation. Federal reserve to making loans for the purposes associations through which it is It is not economical, however, to attempt than 50 per cent of the value of banks and members of that specified in the case of the Federal contemplated that the Federal to save by using an inferior alum or phosphate the land mortgaged and 20 per system are empowered to buy land bank. land banks shall make their loans baking powder just because it is cent of the value of the permanent and sell these bonds. They are The Joint-stock Banks but in, the event that a local loan insured improvements upon to be issued in denominations of cheap, and thereby risk the quality and The joint-stock bank, like the association is not formed in any it. $20, $50, $100, $500 and $1,000. Federal land banks, cannot v'^^locality within a year, the Federal wholesomeness of the food. The loan must run for not less The temporary management charge an interest rate on farm Farm Loan Board may authorie than five nor more than forty of the Federal land banks is to mortgages in excess of 6 per a Federal land bank to Royal Baking Powder adds only healthful years. be in the hands of five directors cent, nor shall such interest rate make loans on farm land through qualities to food because it is made from Every mortgage must provide appointed by the Federal Farm exceed by more than 1 per cent approved agents. cream of tartar, derived from grapes. for the repayment of the loan Loan Board. As soon, however, the rate of interest paid by the Ten or more persons who own under an amortization plan by as the subscriptions from the bank upon its issue of bonds. A and cultivate form land qualified Hie difference in cost cf a pan cf biscuits means of a fixed number of annual loan associations total $100,000, joint-stock bank is limited in its as security for a mortgage loan or semi-annual installments regular directors are to be appointed or of a cake made with Royal Baking bond issue to fifteen times its under the act, or who are about sufficient to meet all interest and as follows: Three district capital and surplus. Po4wder as compared with cheaper powders to own and cultivate such land, pay off the debt by the end of the directors, resident in the Among the restrictions placed nuly form such an association, made of alum or phosphate of lime, which term of the loan. The install district, shall be appointed by the on these banks under the act are jprovided the aggregate of the ments Required will be those published are derived from miner: sources, is about Federal Farm Loan Board to represent (1) that their mortgages must loans desired by the membership in amortiz tion tables to S one cent, which is surely too small an the public interest, and provide for an amortization system is not less than $20,000. be prepared by the Farm Loan six local directors, resident in amount to warrant the risk. of repayment such as is prescribed Borrowers are Stockholders Board. the district, shall be elected by in the case of loans thru Each member must take stock The bank is given power to the farm loan associations, who the Federal land banks, and (2), ROYAL BAKING POWDER CO., NEW YORK in his association to an amount protect itself in case of default must be stockholders in the that they shall in no case demand equivalent to 5 per cent of the by recalling the loan in whole or bank. The Federal Farm Loan or receive under any pretense amount he wishes to borrow. in part or taking other necessary Board shall designate one of its any commission or charge not This stock the association holds associations, for the proper cancellation ed for violations of the act, malfeasance action. appointees to act as chairman. specifically authorized by the act in trust as security for the member's of mortgages, and for in office, fraud, embezzlement, Interest Rate Paid The act requires that at least and approved by the Farm Loan individual loan. The association, the safe custody of mortgages defalcation, or other illegal one of the three district directors No Federal land bank is permitted Board. in turn, when applying offered as security for bonds. practises. shall be experienced in farming, to charge more than six for The bonds of the joint-stock money from the bank must When any mortgage offered as andx actually engaged at the per cent per annum on its farm land banks are exempted from subscribe for stock in the bank security for bonds is withdrawn May Come to This. time of his appointment in farming mortgage loans, and in no case to an amount equivalent to 5 per taxation. Their capital stock, the bank is required to replace "Is this a ten-cent store operations within the district. shall the interest charged on however, is not exempted. cent of the sum it wants to obtain the security with other mortgages, "It is, madam." farm mortgages exceed by more Any campensation paid to The law, through the Farm for its members. This stock or with other satisfactory "I heard you have wonderful the directors must be approved than one per cent the rate paid Loan Board, provides the necessary is held in trust by the bank as collateral. bargains. Where is your automobile on the last issue of bonds. by the Federal Farm Loan machinery for frequent examinations security for the loans it makes Heavy penalties of fine or imprisonment, department?"—Louisville Board. For example, if the bank pays of the banks and the through the association. If a or both, are impos­ Courier-Journal. only four per cent on an issue prospective borrower has no Officers of Associations of bonds, it cannot charge more \pioney with which to pay for his Each loan association must than five per cent for the next association stock, he may borrow have a board of direstors and a farm loans it makes. the price of that stock as a part secretary-treasurer. The directors of Out of this margin of not to the loan on his farm land. shall serve without pay. The exceed one per cent, together Under this plan, then, every secretary-treasurer shall receive with such amounts as it can earn borrower must be a stockholder such compensation as may be determined on its paid-in cash capital, the by the board of directors. in his local association, and each bank must set aside certain reserves association a stockholder in its The association must appoint and meet all its expenses. district bank. Each stockholder an appraisal committee for Any balance or net profits can the purpose of valuing lands offered in an association is liable for the be listributed as dividends to the twice the amount of his stock. as security for loans. No loan associations or other stockholders. member of such committee shall How Loans Are Obtained The loan associations, have any interest in the property member of a national farm from their bank dividends, after upon which he passes. loan\ association, before obtaining setting aside the required reserves a* loan, must, fill out an ap^plication Funds for Current Expenses .. and'meeting expenses, can blank suppliend to the To provide funds for current declare association dividends to loan association by the Federal expenses, the loan association their members. In this way the Farm Loan Board. This application may retain as a commission, not profits, if any, will be distributed blank and other necesary to exceed one-eighth of one per among the borrowers and will papers will then be referred to cent semi-annually upon the un-% to that extent reduce the amount a loan committee of the association paid principal of the loan, from of interest actually paid by them. which must appraise the each interest payment. This commission The Federal Land banks are operty offered as security. is to be deducted from specifically prohibited from making the dividends payable to such Such application as is approved a charge, in connection with by the loan committee is then farm loan association by the Federal making a loan, any fees or commissions loan bank. If the commissions forv^ardetf to the Federal land which are not authorized bank and must be investigated are not adequate, and the by the Farm Loan Board. and reported on by a salaried appraiser association does not wish to assess The authorized fees need not be of the bank before the members for current expenses, paid in advance but may be made loan is granted. This appraiser it may borrow at 6 per My dealer was fight part of the loan. is required to investigate the cent from the Federal land bank solvency and character of the Amortization Plan to an amount not to exceed in do satisfy! they prospective borrower as well as It has been said that all loans the aggregate one-fourth of its the value of his land. When a are to be repaid on the amortization bank stock. loan is granted the amount is plan. This plan calls for a The law requires both the land forwarded to the borrower thru nufnber of'fixed annual or semiannual banks and the farm loan associations the loan association. payments, which include to make provision for certain not only all interest and charges reserves before they can pay Loans From Land Banks There's more to a cigarette than merely any dividends. due the bank, but the principal The act specifically defines the pleasing your taste." Other cigarettes, besides as well. These payments are so In sections where local conditions purposes for which loans may be Chesterfields, can do that calculated as to extinguish the do not make the formation obtained. These are: debt in a given number of years. of associations practicable, the "First—To provide for the But Chesterfields do more—they begin After five years the borrower Farm Loan Board may author-i purchase of land for agricultural where the others stop/ esu. has the right on any interest ize the Federal land bank to date to make, additional payments make loans through agents approved "Second—To provide for the Because Chesterfields satisfy!—they give on the principal in sums by the board. These ag-1 purchase of equipment, fertilizes you the true meaning of smoking! of $25 or any multiple thereof, ents are to be banks, trust companies, and live stock necessary for thus discharging the debt more mortgage companies or fie proper and reasonable operation Yet they're MILD! quickly. savings institutions, chartered by of the mortgaged farm the the state. They may receive as term 'equipment' to be defined Funds Available for Loans This new combination ("satisfy" yet mild) compensation the actual expense by After a Federal land bank has the Federal Farm Loan board. can be had only in Chesterfields—because no involved in transacting the loan "Third—To provide buildings loaned on first mortgage $50,000, cigarette maker can copy the Chesterfield and in addition thereto a sum not it can obtain permission from the and for-the improvement of farm to exceed one-half of one per lands the term 'improvement' farm loan board to issue $50,000 blend! cent per annum on the unpaid in farm loan bonds, based on to be defined by the Federal Try (Chesterfields today principal of the loans made Farm Loan Board. these mortgages, sell such bonds 55 through them. When the Farm in the open market, and use the "Fourth—To liquidate indebtedness Loan Board decides that a locality of the owner of the land money thus obtained to use on is adequately served by farm mortgaged* existing at the time other mortgages. loan associations, no further the organization of the first This process of lending on loans are to be made«through national farm loan association es.*1^ mortgages and selling bonds in agents. tablished in or for the county in issues of $50,000 may be repeated which the land mortgaged is until bonds to the amount* of Joint-stock Land Banks 'M situated, or indebtedness subsequently twenty times the bank's paid-up In addition to. the system of incurred for one of the capital are outstanding. If each 12 Federal land banks and the 't purposes mentioned in this section."-, bank should have only its requir national form loan associations ed minimum paid-up capital of of borrowers, the act permits the '''v'/--!': CIGARETTES Loans may be made, only on $750,000, this plan will provide establishment of joint-stock land first mortgages on farm lands. eventually, if all the authorized banks and authorizes them to Only those who own and culate bonds of the twelve banks are carry on the business of lending 20 for 10c 5 farm land or are about to sold, over $180,000^000 to lend on directly to borrowers on farm Xhfo&AfA '.^1 and cultivate such land are first mortgages on farm land mortgage security and issuing I The banks, however, can increase ed,|tled to borrow. §jj|| form loan bonds. These banks Attnctiro tinaof 100 Choatorfioldb wat, prepaid, on receipt of 50c, if thelo one can morrow save for their capital stock above must have a capital of not less •J PR cannot supply TOO. —•and yet they're MILD St 'i i'iT iH**«tt Myon tobacco dier, purposes stated in the act the required minimum and so in than $250,000. They are undei^ gCo»212 Fifth Avo., Now Yocfc City and those who, after borrowing, crease the amount of the bonds the supervision of the Federal Tnot use the money for the they can sell, and thus increase Farm, Loan Board, but the gov-*' otht •sat-..