Joint-Stock Land Banks

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JOINT-STOCK LAND BANKS were chartered under the authority of the Federal Farm Loan Act, approved 17 July 1916. These banks were financed with private capital and were permitted to make loans in the states in which they were chartered and in one contiguous state. About eighty-seven charters were granted, but not all of the banks opened for business. The joint-stock banks were most numerous in the more prosperous agricultural areas—Iowa, Illinois, Minnesota, Missouri, Texas, and California. The original law did not limit the size of loans, but an amendment to the act in 1923 limited the loans to agricultural purposes only and reduced the size of loans to $50,000 per borrower. The federal government appraised the borrower's land, and the amount of a loan was limited to a percentage of the value of the appraised land and buildings.

These banks thrived during the World War I land booms but declined rapidly when the agriculture industry slumped in the late 1920s. Many of the banks failed. Accusations of mismanagement followed, and many banks reorganized or liquidated. The Emergency Farm Mortgage Act of 1933 ordered the joint-stock land banks liquidated. To help with the liquidation, the Farm Credit Act of 1933 provided the Land Bank Commission with $100 million for two years and renewed the provision for two more years in 1935.


Farm Credit Administration. Annual Reports. Since 1933.

Federal Farm Loan Board. Annual Reports. 1916–1933.

Wright, Ivan. Farm Mortgage Financing. New York: McGraw-Hill, 1923.

IvanWright/a. r.

See alsoAgriculture ; Banking ; Financial Panics .