The Ward County independent. [volume] (Minot, Ward County, N.D.) 1902-1965, 1921-05-12

tably, and not one for another, for all
contracts and debts of the association
to the extent of the amount of stock
owned by them at par value, in adj
dition to amount paid in as repre-
scented by their shares; in other
words, on the same basis as stock
holders in national banks. Conse-
quently the board of directors nat
uraly will handle the business on
conservative basis.
Loan funds are furnished by bonds
issued by the Federal land banks based
on loans made. The Land Bank in
St. Paul has outstanding 44,50O, 000
Reserve earned 100000 Paid out
earnings in dividends to borrowers
pa 900 and has earnings on hand I'M
divided S26O,0OO. About Is months
ago the Federal Farm Loan Board
reported that 94,S15 loans had been
made aggregating SPACES, 900. A
year ago it was reported that applica-
tions were pending for 179,734 farm
ers for loans totaling SAT-, 100000.
quite neat little sum. An issue of
$40, 100000 of Federal Land Bank
five per cent bonds dated May |, 1927
is now being offered and are exempt
| from Federal, State and local taxa
ton, and the bonds are acceptable by
the United States treasury as secur-
ity for government deposits. At the
present time the twelve Federal Land
Banks have capital of $24,OOO,OO0
of which the government owns about
81, 100000 and the United States
treasury has purchased over $751;
100000 Federal Land Bank bonds.
you will remember, one of the planks
in the Nonpartisan League platforms
provides for rural credits, and the
result was the elaborate state bank
with rural credits side issue and as
it proved rather dangerous expert
ment with its political favoritism, 1t
would seem that rural credits can
best be had with an organization pro-
vided specifically for the purpose,
and the South Dakota law seeks to
cover the ground very satisfactorily.
Our sister state has had no trouble
whatever in disposing of the bonds
and has issued such bonds in the sum
of 100000 and has closed appli-
cations from 1912 farmers for total
loans of $32,267 $50 the board has
applications on hand for nearly
SO 100000 and is on the job all the
time as these applications are being
investigated and acted upon now. Up
to date the Board has received 49,
625 applications amounting to SOL
100000.
The loans are made on the amortiza-
ton plan and payable in 30 years
with the privilege of part or full pay
ments at the end Of 5 years. In this
way the payment gradually decreas-
es and if regularly made the loan has
been wiped out at the end of the
30 year period.
The board consists of five men,
bers, one of whom is the governor OF
the state who is ex-officio president of
the board, and he appoints four men,
bers who must be citizens of the
state, persons of experience in fin
ances, loaning money and determin-
ing real estate values. One member
is known as rural credit commissioner
and receives salary of $4,000 per
annum; the treasurer is paid $4,000
per annum; the two other members
receive per diem of $40 and all get
the necessary travelling expenses
while discharging the duties Of the
office. The appointments are for six
years but the governor may remove
any appointed member at any time,
when, in his judgment, he has failed
to properly and effectively discharge
the duties Of his office All mem
I bers are under bond and the board
makes monthly statement, one
copy filed with the secretary and the
other with the governor.
The basis for loans is the same as
under the Federal Farm Loan Act,
but the, maximum amount loaned is
70 per cent on the land and 40 per
cent on improvements. This is con-
siderably larger than the government
minimum and may possibly be too
large. In our private loan business
we usually figure a loan basis of
about 40 per cent of land value, but
as rule the loans run 5 years. On
the amortization plan where the loan
is gradually reduced a larger per-
centage can be loaned.
The maximum amount loaned is
$4,000 and the minimum $500
Under the South Dakota law the
application is made direct to the
board, SO that no association is need
ed as under the Federal Act, hence
the borrower is only liable for his
own loan and is saved considerable
red tape.
| The borrower is supposed to pro-
cure two appraisers who are familiar
with the land and in no way interest
ed, and the examiner representing the
board ascertains the value. and desir-
ability of the loan.
| Money obtained must be expended
only to discharge indebtedness incur
red for the purchase of the, land, for
the payment of mortgage or debt
already existing, or for making i'm
provements on the farm lands mort
gagged, so that speculation is not en-
couraged
All mortgages and notes taken for
money run direct to the state of
| South Dakota.
The bonds are issued in denomina-
tons of S25, so, 100, $500 and 500
or such other denominations as are
decided by the board and run for