The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1904-04-28

MONEY LENDERS
ARE WORRIED
Status of Mortgages Is the
Question Lawyers Study.
TWO VIEWS ARE TAKEN
Courts Must Act Before Points
Are Settled.

Guthrie Q. T, April PA Muskogee
dispatch says the bankers and invest
ment companies have experienced a new
sensation relative to the clause in the
Indian appropriation bill removing the re-
strictions upon the sale of lands by Creek
freedmen. The question is whether the
restrictions upon mortgages were also
removed, and its determination means the
gain, or probable loss of thousands of
dollars to money lenders of all classes.
For the past two days the offices of the
leading law firms have been filed with
clients seeking advice, but so far the
majority of the attorneys are unprepared
to give a definite opinion. In the mean
time they are examining the supreme
court rulings, and at present it appears
very doubtful if a mortgage without the
approval of the secretary of the interior
would hold. 1t is probable that within the
next few days the law firms will have
arrived at some definite conclusion, but
il is likely that a test case will have TO
be submitted to the courts before COM
plete confidence viii be restored.
For several months the banks and in
vestment companies have been lending
money to freedmen upon the theory that
when the restrictions should be removed
by congress a mortgage would be given
as security. In this manner thousands
of dollars changed hands, and when, last
Friday, the news that the bill had been
signed reached the territory, the creditors
began to secure mortgages. 1t was then
hot lna leg llIy
but since then a thorough examination of
the alienation clause has disclosed the
fact that neither mortgages nor leases
are referred to. The law says merely
that the restrictions upon the aliena-
ton of lands, etc.. shall be removed
Some hold that as an alienation is
greater than any agreement as to mort
gage and leases, it will naturally include
everything and that an adult freedman
can. at will, make any sort of bargain in
connection with his property. But there
are two important things 10 consider
which stand out in bold letters against
this theory. One is that the courts of the
majority of the states have held that a
mortgage is not an alienation. and the
other, which seems TO carry even greater
weight. is a clause in the supplemental
agreement with the Creek nation.
The clause in the Greek agreement
reads: Lands allotted to citizens shall
not in any manner whatever. or at any
time, be incumpered taken or sold to Sc
cure or satisfy any debt, or obligation,
nor be alienated by the allottee or his
heirs before the expiration of five years
from the date of the approval of this
supplemental agreement. except with the
approval of the secretary of the interior
Now it is perfectly clear that the dis
1unctive clause in this sentence beginning
with NOR alienated" has been repealed
by the appropriation bill, but the leading
clause which provides that the land shall |
not be 'incumbered for debt is not re
ferred to.
So it appears that the only question now
is whether a mortgage is an incumbrance /
If ii is so considered, the lawyers agree I
that this restriction remains. and will re- |
main until the five-year limit expires in /
1907. The courts of North Carolina. Kan |
sas and Indiana have held that a mort |
gage is an alienation. In all of the other /
states the reverse view has been taken. /
except possibly in Arkansas. whore /
as between the parties, but dependent up |
on conditions.
The fact that the Arkansas statutes I
Seem to remain partially on both sides of !
the question only makes the case more /
complicated. Where a decision is clear
and definite, the Arkansas laws hold in .
Indian territory. but in cases whose na-
ture is such that the supreme court of /
Arkansas has not defined itself the weight |
of authority is supposed to govern.
OF course. upon the secretary OF the in
terior's approval any allottce can mort
gage his property. but such a method 1
would be wholly impracticable Hundreds
of freedmen. in fact, the ma aioritv of
them, have borrowed money. and their
creditors are unsecured. Many are trust
ing TO blind luck and accepting mort
cages. In fact, it seems about the only
thing that they can do. However. very
few are extending any additional loans.
although the demand is great
The matter of leases is in about the
same attitude. The Greek agreement pro-
vides: Leases for mineral purposes may
be made with the approval Of the secre-
tary of the interior. and not other
wise" Since the bill was signed there
have been as many as 100 leases in Mus
kogee alone for mineral purposes. There
were fifty last Saturday. and since that
time they have been made right and left
and without the approval of the secre-
tary of the interior
However. the lease proposition promises .