The Newark journal., 1918-07-25

State, and to place the proceeds in the
State Treasury in fund to be known
as the Arkansas Rural Credits Loan
Fund"
Sec. 3. Said bonds shall be issued
in denominations of $500, $4,000,
$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.
Sec. 4. 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 any
purchaser of land.
See. 5. 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 a
degree to justify such expenditure;
and (e) for the satisfaction OF en-
cumberances 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 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 a 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 inyalidate a
loan when once made, nor shall any
thing herein contained be deemed to
prevent any farm owner from selling
on leasing lands subject to such in
eumbrance; 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 clause providing
| therefor
Sec. Z. 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
and the applicant, said period to be
not less than five nor more than thu
ty-six years; but any debtor may
l1quldate any part or all of his indebt-
edness IN amounts of $4,000 or multi
pies thereof upon any amortization
payment date.
Sec. s. 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 l 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. 9. All surplus funds accruing
from the operation of the system of
rural credits herein provided for, af-
ter paying interest accruing on the
aforesaid bonds, and all operating and
other expenses arising from the ad-
minlstration 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
shall 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 1t and become part of it. The
said Arkansas Rural Credits Reserve
Fund shall be irredueible, 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 Operate" and occupy"
| II In, h.