Harlan F. Stone

“ If the transaction were unaffected by the provisions of the Farm Loan Act, it would require no argument or citation of authority to support the conclusion that the delivery of the note and mortgage to the lender, and the receipt of the check from the lender, payable to the obligors upon the mortgage indebtedness, and their indorsement and the collection of it, would establish their liability for the payment of the loan, regardless of what might become of the proceeds. ”

“ The Federal Farm Loan Act was adopted in response to a national demand that the federal government should set up a rural credit system by which credit, not adequately provided by commercial banks, should be extended to those engaged in agriculture, upon the security of farm mortgages. ”

“ Petitioner's check for the amount of the loan, less authorized charges, made payable jointly to the secretary-treasurer of the association and respondent, was delivered by petitioner to attorneys of the respondent together with a 'closed loan statement.' This statement was a detailed report of the loan transaction, including data of the disbursement of its proceeds and of fees charged by the association to the borrower. ”

“ To adapt the system to local needs and to promote co-operation among borrowers, it was proposed that the loans should be made through local associations controlled by their membership, composed exclusively of borrowers. ”