Fed Farm Loan Act: What is it?

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The Federal Farm Loan Act was passed in 1916 to help small farmers keep up with larger farms. It created the Farm Credit System, which allowed banks to lend up to 50% of the value of land and 20% of improvements. This legislation was part of the Progressive Era, aimed at regulating big business and exposing corruption. The Farm Credit System has provided competitive rates on loans to small farms with government support.

The Federal Farm Loan Act is a law passed by the US Legislature and signed into law by President Woodrow Wilson in 1916. It was created in response to small farmers struggling to keep up with the output of larger farms. He created the Farm Credit System, a network of federally backed banks with the specific purpose of promoting investment in small farms. The law allowed these banks to lend small farmers up to 50% of the value of their land and up to 20% of the improvements the farmers had made to their land.

The Federal Farm Loan Act sought to level the playing field between smaller and larger farmers. In the early 1900s, the attitude of small farmers in the Midwestern United States was one of angst toward big business. This was only one faction of a larger movement to regulate the growing power of big business magnates who held monopolies over their respective industries. This growing angst gave rise to what is known as the Progressive Era in the United States, which lasted from the 1890s to the 1920s. The Progressive Era was a time of activism in which actions were taken to hold government and big business accountable for their uses of power.

The Federal Farm Loan Act is one of the most famous pieces of legislation passed during the Progressive Era in the United States. During this time, the US Legislature passed several laws aimed at regulating big business and exposing corruption. This piece of legislation is often credited along with the Sherman Anti Trust Act and the Clayton Anti Trust Act as strong legislation that helped achieve the goal of breaking the grip of big business in the United States during this period.

The Federal Farm Loan Act attempted to achieve its goals through the creation of the Farm Credit System, a system of banks designed to specifically cater to people operating smaller farms. Through these banks, small farmers were able to take on up to 50% of the value of their land plus 20% of the improvements made to the land, including soil improvement and facilities. The US government has provided each bank with $500,000 (USD) for small farm loans. Thanks to this government support, banks have been able to provide competitive rates on loans to skilled small farms and encourage investment.




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