The Churchill county standard. (Fallon, Nev.) 1908-1920, 1917-04-25
FEDERAL farm LOANS ON j. S.
RECLAMATION PROJECTS A PROBLEM

cases, Wnere the lanQ mas Deen IN
cluded within an irrigation district
organized under the state laws,
where the district contracts to meet
the water right payments and levies
assessments on the individual own
ers analogous to special improve
ment assessments, he holds that our
Board would be permitted to author
iZe mortgages to be taken. He adds
that his conclusions are in accord
ance with the general practice of
trust comnanies and insurance COM
panies. Even in the fourth class of
cases. where Judge King holds that
a mortgage might be taken, the ex-
istenee of the annual assessment
would have to be taken into account
in appraising the value of the land,
as land that was not subject to such
an assessment would manifestly be
of more value than land that was
subject"
In the following letter to Con-
gresham Hayden from Herbert
Quick, member of the National Farm
Loan Board, Is presented what is
perhaps the best method of remov-
ing the disability under which pro-
ject settlers now labor:
March 30, 1917.
Hon. Carl Hayden. House of
Representatives.
Dear Mr.. Hayden:
This is in reply to yours of March
10th with reference to loans on
lands under United States Reclama-
tion Projects.
Some time ago we submitted this
question TO the Solicitor of the
Treasury, who advised us that as a
matter of law where the Government
retains a specific lien on the lands
our system cannot make loans un-
der the law requiring us TO take
nothing but first mortgages. II
other incnmberances aside from
mortgages were not counted as
mortgages. there would be nothing
to prevent US from loaning on lands
incumbered by trust deeds, for in
stance, and such construction
would probably vitiate our securities
in the bond market. We also are
advised that where the water users
associations are transformed into
district irrigation projects and the
irrigation charge becomes a district
charge, like paving, draining, or
other charges of an analogous ma
ture. we may loan so far as the law
is concerned. The matter then be
comes one OF finance and not of law,
and where the interest of the farmer
rs reduced TO a small equity by
reason of the large irrigation charge,
tie land banks should probably have
70 dec inc making lonns.
TIE best solution of this problem.
n seems to me, would be for Con-
gress to pass an amendment to the
Reclamation Act waving its first
lion on lands under irrigation pro-
jects in favor of mortgages made
under the Federal Farm Loan sys-
tenn where the loans are made for a
minimum period of not less than
thirty-six years and the interest rate
is not more than per cent This
would make the Government lien
subject only to an annual charge of
$50 per thousand dollars of loan and
would enable us to adhere strictly
to the essential principle of first
lien loans.
need not add that we are anxi-
GUS TO help the farmers on the irri-
cation projects. | think that their
plight appeals to this Board more
keenly than that of any other class
of farmers and anything we can do
consistent with the safety of the en-
tire system. we shall not only gladly
DO but shall do 1t eagerly.
Yours sincerely,
tSigned) HERBERT QUICK"