The Newark journal., 1918-07-11

state treasury IN fund to be known
as the Arkansas Rural Credits Loan
Fund"
Sec. 8. Said bonds shall be issued
in denominations of $500, $4,000, I
$4,000 and 100000 and shall be is
sued in series of 100000 or multi
pies thereof drawn to mature in not
more than thirty-six years; nor shall
said bonds be sold until applications
from bona fide purchasers of land ag-
gregating 100000 have been filed
with and approved by the State Land
Board. Said bonds shall bear inter
est at the rate of four per cent per
annum, and shall be exempt from tax
alton by the State of Arkansas, or
any of its subdivisions.
See. A. Said State Land Board is
authorized and directed to loan the
moneys in said Arkansas Rural Cred
its Loan Fund to bona fide purchasers
of farm lands in Arkansas, upon notes
secured by mortgages or deeds of
trust constituting first liens on such
farm lands in amounts which shall not
exceed seventy five per cent of the
appraised value of such lands. The
credit of the State shall not be loan
ed to any person to purchase more
than 80 acres of land, nor land valued
at more than $4,000 per acre. Nor
shall loan of less than $4,000 nor
more than 100000 be made to anv
purchaser of land.
Sec. ). Such loans shall not be
made except to owners who Operate"
and occupy" lands mortgaged and
shall be made for the following pur-
poses; (a) The payment for lands
purchased; (b) the purchase of live
stock and other equipment, and the
making Of improvements which in the
judgment of the board will increase
the production of such lands or add
to their value as farm home in
degree to justify such expenditure;
and (c) for the satisfaction Of en-
eumberances upon such lands, which
IN the judgment of said board, were
incurred or assumed by said applicant
for the aforesaid purposes.
Sec. 6. Every applicant for a farm
| loan shall state clearly in his applica
ton the purposes for which such loan
Is desired and upon its approval by
the board this statement shall be
deemed part of the note or contract
under which the loan is granted. But
no failure to apply such funds to the
purposes stated in said application or
enumerated herein shall invalidate
loan when once made, nor shall any
thing herein contained be deemed to
prevent any farm owner from selling
or leasing lands subject TO such IN
cumbrance; but if he shall violate
his said contract By applying the
moneys borrowed to purposes other
those stated in his application or emu
merated herein, or if he shall lease
such lands or sell them to any per
son not fulfilling the conditions and
purposes provided herein, said board
IS authorized and directed to require
the repayment of said loan upon six
months notice, and said note or con-
tract shall contain a clause providing
therefor
Sec. 7. Such loans shall be repaid
with interest accruing in annual In
stallments on the amortization plan.
| such installments being fixed at such
sums as will cover the interest rate
and will liquidate the debt in a period
to be agreed upon between said board
not less than five nor more than thll
ty-six years; but any debtor may
liquidate any part or all of his inIebt
edness in amounts of $1,000 or multi
pies thereof upon any amortization
payment date
See. 8. The rate of interest on
loans shall be five per cent per an
mum; provided that no Farm Credit |
Bonds shall be sold for less than par;
and provided further that the board
shall require each applicant to pay
an initial charge of / per cent of the |
loan granted, the minimum charge to |
be $1,000 to cover the cost of apprais- |
al and examination of title.
Sec. g. All surplus funds accruing |
from the operation of the system of |
rural credits herein provided for, af- |
ter paying interest aceruing ON the |
aforesaid bonds, and all operating and |
other expenses arising from the ad- |
mlnlstration of said system of rural |
credits shall be placed in the State
Treasury and become a part of the |
fund to be known as the ARKANSAS
Rural Credit Reserve Fund" Said |
Arkansas Rural Credits Reserve Fund |
snail be loaned on farm lands in the |
manner herein provided for the Ark
ansas Rural Credit Loan Fund. and |
the interest accruing from the loans |
made from the said Arkansas Rural |
Credits Reserve Fund shall be added !
to it and become part of it. The
said Arkansas Rural Credits Reserve
Fund shall be irreducibIe, except that
1t may be drawn upon to reimburse
the State for loss in the administra-
ton of said systemof rural credits.
Sec. 10. The Legislative Assembly
shall provide in such detail as it shall
deem advisable for the carrying out
and administering of the provisions
of this amendment, and shall provide
adequate safeguards against the use
of such loans as an aid to the pur-
chasing and holding of lands for the
purposes of speculation Such safe
guards shall include clear definitions
of the terms "operata" and "ocrIpv"