The Rural Credits Law: A New Era for Farmers
A detailed breakdown of the 1916 Federal Farm Loan Act, designed to help regional farmers secure affordable credit for land and equipment.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
The Federal Farm Loan Act, popularly called the 'Rural Credits Law,' was signed by the President and became a law on July 17, 1916. The primary purpose of this act is to promote agricultural prosperity by enabling farmers to borrow money on mortgage security at a reasonable rate of interest and for relatively long periods of time. To attain this result, two farm-mortgage systems are provided: (1) A system operating thru regional land banks, and (2) a system operating thru joint-stock land banks. Under the federal land-bank system, the act provides for federal land banks which make loans thru local national farm-loan associations composed of borrowers. These associations shall be shareholders in the banks, and in that way the members who are the borrowers will share in the profits of the bank. The rate of interest charged on farm loans shall not exceed 6 percent per annum.
“The primary purpose of this act is to promote agricultural prosperity by enabling farmers to borrow money on mortgage security at a reasonable rate of interest.”
This 1916 law was a cornerstone of early 20th-century agrarian policy, attempting to stabilize the volatile finances of small-scale farmers in the Columbia Basin. While modern agricultural subsidies and credit markets look very different, the core struggle—how family farmers manage debt against the high cost of land and equipment—remains a central issue in Kennewick’s rural economy today.
From readers
No comments yet. If you know something about this story — a correction, a family memory, a source — it belongs here.