The Coconino sun., 1920-06-04
HANDLING OF STATE
 LAND FUNDS FOR
 INCOME PURPOSES

were donated by congress to Arizona, some 2,500,000 acres selected, the question of an income from these lands that the intended support to the var ious institutions for which the lands were granted may be realized, is one upon which many differ The funds from sales of these lands must be kept intact as a permanent trust fund. This means that just as fast as the lands are sold there may be three classes of money realized from the sales. The expenses of the sale, the principal of the sale, or if sold on the payment plan, part principal and part unpaid purchase, the latter drawing interest. Or, the lands may be leased, in which case the rent falls in the same class with interest.
 Out of the permanent funds real ized from sales, some loans have been made to private persons, in fact loans numbering up to 393, to the aggregate amount of $1 ,012 2,776.0O has been loan ed in this manner. These loans draw six per cent interest, and are secured by first mortgages upon real estate, which mortgages run for period of not less than five years nor exceeding fifteen years, with provisos that the loans may be paid at any time upon payment of three months interest in addition to all other interest due up to date of payment. No part of the prin- cipal sum is due inside of five years, but each year thereafter such part of the principal is due, as will when paid annually each remaining year during the life of the loan fully pay same at maturity. For example, if a five thousand dollar loan was made to run full fifteen years, five hundred would be due at the end of the sixth year, and five hundred at the end of each year of the remaining nine years. If the loan were for ten year period, first pay of one thousand dollars will be due at the end of six years, and a similar payment each year for four years thereafter Adding the interest, annually to the payments on the prin- cipal. The mortgage laws of the state are made to apply to these state loans. In event of foreclosure, the lands be- come the property of the state, and the state land commissioner again admin isters the lands for the benefit of the same fund from which the loan was originally made. The interest goes to the credit of funds appropriated for the particular institution whose trust lands are loaned in the particular mortgages, and under recent rulings of the departments, is subject to use for the current support of those insti- tutions. The same rule applies to land rentals that applies to interest.
 The question is sometimes asked as to how and when a loan of the funds provides that all applications for loans referred to may be obtained. The law on farm lands shall be made on blank forms prepared and furnished by the state treasurer It requires the ap- plication to contain the sworn states ment of three disinterested owners of lands situated within the county with the lands upon which the loan is re- quested. The persons must set forth in their statement an estimate of the actual cash value of the land offered, together with such other information as may be required by rules and reg ulations to be adopted by the state treasurer and the land commissioner. If the value of the land as fixed by these persons is less than twice the amount of the loan requested the state treasurer must reject the loan, and re- turn the fee to the applicant. If the estimated value exceeds twice the loan