The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-08-26
School Finds Out That Period
OF Time, or Longer, Must
Be Paid, Renewed or Will
Be ForecIosed.
TROUBLE IN STORE
FOR THE BORROWERS
New Ruling Will Be a Great
inconvenience to Men Who
Have for Years Just Been
Paying Interest.

luQldudpOlA6, Aug. AO-1 uc COuuLJ
auditors from all over the state have
been informed that they must call in
every school fund loan that has run
five years or longer, and that all of
such loans must be either paid, re-
newed or foreclosed. 1t is feared that
this will mean a great deal of trouble
for borrowers who have been carrying
their loans along for years by merely
paying the interest.
The County Auditors association is
in session In this city, and this school
fund loan matter is one of the. most
important propositions that has been
considered at the meeting. The attor-
ney generals office was appealed to
finally and 1t gave an opinion to the
effect that school fund loans cannot
under the law run longer than five
years. The law so states in emphatic
language.
Are Having Troubles.
Counties are already having trouble
to loan the school funds which are
allotted them by the state, and when
this restriction is added they will
have a still harder time to place the
money. The law requires each county
to accept the school fund money al
loted it by the state and the county is
percent interest on all such money al
loted to it. 1t makes no difference
whether the county is able to loan this
money out or mott must pay the
state the six percent interest on the
entire amount Just the same. Some
counties have succeeded In loaning
all OF its allotment. but a majority
of the counties have not, and there
fore they are losers on the deal to the
extent of the six percent interest
which 1t has to pay on the funds which
It Is not able to loan.
The demand for school fund loans
has not been as brisk in the last few
years as it was formerly, because of
the rate of interest which has to be
charged. It is we'll known that bor-
rover can easily get all the eastern
and private money " wants at five
percent, which is one percent less
than what he has to pay for school
fund loans, because people will not
pay six percent for a loan when they
can get it for five percent.
10 Laying Idle.
The result has been that in many
counties the school fund money has
accumulated and has been lying idle in
the county treasures while the coun-
ties were required to keep right on
paying interest to the state for it. 1t
Is pointed out that the only way to
remedy this difficulty is to have the
ty auditor to loan the money at the
current rate Of interest. whatever that
may be at the time the loan is made.
In that way 1t is believed every dol
lar of the school fund money could
be loaned and be made to earn inter-
est for the county instead of being
dead weight In the county treasury.
Many of the county auditors have
allowed the school fund loans to run
beyond the five year limit, because
II they would call in the loans at the
end of the five year term the borrow
ers would borrow money from some
one else at lower rate of interest
and pay them off. So they have al
lowed the loans to run in order to
keep the money employed. But now
that the attorney general has told
them that this is illegal it will be up
TO the auditors at once to call in all
overtime loans. Some of the auditors
say that II they have to do this it will
mean that many borrowers will not
be able to raise the money to pay off
their loans. In such cases the mort
cages will have to be foreclosed. and
the property sold to pay the loans.
They say they fear that many a man
will lose his farm or his home in this
way. Therefore. the question is one
of extreme importance