Page images
PDF
EPUB

LOAN SYSTEM

NEW METHOD OF

FARM MORTGAGE FINANCE, UNDER

NATIONAL SUPERVISION

A Practical Manual upon organizing and conducting na-

tional farm loan associations, also joint stock land banks.
Showing how farmers, investors, bankers and the public

may obtain the fullest benefit of the system.

By HERBERT MYRICK

Chairman Massachusetts Farmland Bank
Author of Co-operative Finance, How to Co-operate, etc., etc.

INCLUDING FULL TEXT OF THE FEDERAL FARM LOAN ACT

NEW YORK
ORANGE JUDD COMPANY

COPYRIGHT 1916
BY ORANGE JUDD COMPANY

All Rights Reserved

HE Federal Farm Loan System of 1916 possesses potentialities of

transcendent importance to the 38 American people. Utilized to the utmost by farmers and investors, with the patriotic aid of the business interests whose welfare is dependent upon a prosperous agriculture, the new statute may prove to be epochal in its economic and social benefits.

The new law is not perfect. It is the work of many minds. It is a well-thoughtout basis for a system that (1) could command the necessary votes to become a national law, and (2) bids fair to accomplish the purposes it aims to serve.

The object of this book is to aid those who so desire to enjoy all the advantages of the new Federal Farm Loan System

The Act is the Magna Charta of American farm finance.

[ocr errors]
[ocr errors]

CHAPTER ONE

PURPOSE OF THE FEDERAL FARM LOAN SYSTEM

TH

HE best safe investment is a first mort

gage on a good farm owned, occupied

and operated by a good farmer. So true is this in the United States that farm mortgages constitute one of the largest classes of investment. The total of farm mortgages now held by American investors probably exceeds 6,000 millions of dollars, compared to nearly 12,000 millions of railroad bonds.

Equity in Farm Mortgages. The average farm mortgage is now probably about one-quarter of the fair value of the mortgaged property. Thus the borrowing farmer's equity in his land and buildings averages seventyfive per cent.

Stockholders' equity in our railroads is a vastly less proportion. The banks of the United States possess an equity of only 15 to 25 per cent in their own resources, because they owe 75 to 85 per cent of their resources to their depositors. Banks and railroads do business mostly upon other people's money,

« PreviousContinue »