The sun., 1918-07-21


loans at less than prevailing rates7
Has he to do anything besides walk into
a land bank Office and hold out his handf
How much can he borrow? What col
lateral security will he have to give? And
having given it, will he be harassed and
delayed by Government red tapef
In other words, as one small operator
said to me, as the blooming system so
sky high that an ordinary man can't reach
it with forty rod pole7'
No, it isn't. 1t is just as easily reach
able by the man who wants 800 as the
man who wants $4,000, and it may be
added that 500 is the smallest amount
that will be loaned and $4,000 is the
highest, and averaging about $500 loans
made in the First district the amount
to each man would probably run from
S2,70O to $1,000.
Ridiculous, isn't it, when you come to
think of it, that lack of such pitifully
small amounts might ditch man in his
life work! Two or three points, how
ever, You should get clear. If there is
delay it is your own fault.
Defective Titles Cause Much Delay.
The greatest cause of delay so far has
been in defective titles to- land. If
YOU have a guaranteed Torrens title, the
loan can be made forty-eight hours after
application. If the title has to be
searched the loan may be delayed three
weeks. Or if the title has to be cleared
Of clouds and defects the loan may be
delayed three months.
This matter Of delay may be very vital
to desperate borrower. In one State in
the First Land Bank district a mortgage
may be foreclosed in two weeks; in an
other in three weeks; in yet another in
six months. The land banks want their
customers never under any circumstances
to take chances on delay.
The next greatest cause of delay is
sending in an application for loan in
the depths of midwinter, when storms
may block roads or snowdrifts prevent
any adequate and certain appraisal of
the land
Another point. In the East You will
not get the loan at lower rate Of in
terest than elsewhere The stabilized uni
versal rate for farm loans is 5l2 per cent.
to the farmer. In the West this Is
lower than the prevailing rate, but please
observe three or four of the big indus
trial loans floated by factories and cor
poratons in the last few weeks have com
manded per cent and 7 per cent, and
while Congress set the rate at 5i2 the
possibility exists that Congress might il
great stringerey came have to raise farm
loan rates to the prevailing rates.
The borrower will never have to pay
any loan shark fees or bonuses. Cases
are on record before the passage of the
land bank act of local private banks
charging a man from 10 to II per cent.
of the face of the loan as a bonus for
getting it for him. All that kind of
abuse is done away with by the act.
Long Time Proves Great Point.
But the great points of salvation to the
farmer are that he can get the money;
he can get it slightly under prevailing
rates, and he can get it on such long
terms, thirty-fve years, that the yearly
payment of a small amount on principal
will amortize the entire loan by the time
he has paid his last interest charge.
That is, 4 young fellow of 25 could buy
a farm on his savings. By the time he
would be ready TO retire his interest pay
ments would be almost negligible. His
mortgage would have been paid off and
he could live In comfort on his farms
earnings. Meanwhile, if he had been any
kind of farmer he would in addition have
been able to save from his yearly revenue
instead of swapping himself by trying to
pay off big principal. The following
table based on semi-annual payments of
interest shows how lightly the debt drags
on the operators shoulders:
install Inter On principal
Year. ment. est. principal unpaid.