Arizona republican., 1921-10-16

Engineer Macleod of the land depart ment, facts appear which warrant and absolutely require an adverse re- port.
 The lands offered as security for the new loan are raw desert lands. No surface water for irrigation is avail able, nor any project in contempla- tion or possible, under which these lands can be irrigated for purpose of cultivation, except by the instalIa- tion of pumping plants. Judging from wells and present sources of water supply to lands in the vicinity. the depth of water will range from 60 foot to a greater depth. As in the case of all water to be deVloped by wells and pumps. the amount of SUD- ply, the value of water for crops and the permanency of any such water, are matters of uncertainty nothing short of actual tests in the course of acutal attempts at crop irrigation will resolve any element of that uncertainty. Without water the lands are of no value other than as grazing lands.
 As to market value of lands: Our information is that the same inter- ests now applying for loan, pur- chased 1920 acres of similar land in the same vicinity with Santa Fe" script, which script at that time had a market value of $3 per acre. In 1916. w. A. Moeur, at that time the state land commissioner, acting un- der appraisement of the office made for purposes of sale, sold School Sec ton Is in township South, range f East for $3 per acre. Reference to plat will show the location of this school section in it's proximity to the Gen. tral Finance corporation holdings. It is claimed with no record to sup port that claim) that this school sec ton was sold by the president of the above corporation at $11 per acre. As bearing upon the value of the lands under discussion. the letter submit ted herewith announces the purpose of the loan requested as being ito pay taxes, interest, contract money. etc" Just what portion of the loan will go to pay purchase price of the lands" and just how much will go for the other purposes mentioned is not known. In other words, informa- ton IS lacking as to the purchase value placed by the Central Finance corporation in bullying the holdings offered as security. Outside of the letter the president stated that the entire holdings of the corporation in the vicinity tincluding other Iands). were acquired at a cost of from S16 to 20 per acre.
 Accompanying the application for the loan is a pamphlet entitled Earn a Farm" In this there is an outline of plan to sell the lands to ranch CTS and farmers at a price per acre of from $200 to $500" Aside from this there is nothing to indicate from what source the Central Finance cor poration will obtain $64,000 to event. ually comply with the requirements of Section III of Land Code of 1915, as amended in 1917. (S. L. 1917, p. 1 ID. Those requirements being that l when loans are made upon unim- l proved farm lands they shall be con- ditioned upon the entire amount | loaned being employed, under reg ulations to be adopted by the gover- nor, secretary of state and state treas ur4r in improvements of the lands | forming the basis of security. Ad- hitting as the applicant does admit 1 in its application letter. that it is now l delinquent 'in taxes "in interest ' 1 'etc." in present loans, no fair mind i ed person could be induced to extend
 a credit which will involve future
 compliance with above quoted pro-
 vision of law
 l The lands offered as security are
 not farm lands" They are raw des- ert lands, without water without pos sibility of water, except at the large expense of installing pumping plants With such plants installed, the land: ! might be farm lands" otherwise un-
 improved, and then fall within tht
 class of lands upon which state loan:
 might be made. There is no provis-
 ion of law under which the state may