Montpelier examiner. [volume] (Montpelier, Idaho) 1895-1937, 1921-12-30
DATA ON GOVERN
.MENT STOCK LOANS


ers, many OF whom are interested
lin procuring farm loans from the
federal government, we publish to-
day an interview with @. @. Gray,
president Of the Bank of Montpelier:
Regarding government money To
hRlp the farmers and stockmen there
does not seem to be any provision
Cor a direct loan on real estate.
Farm loans can be made with gov
ernment assistance but under an old
law. In many cases these loans are
the best that farmer can obtain and
many were made, but the legality
or the law was questioned and the
Law did not operate for couple Of
years. II was declared legal and Is
now In operation. Farmers cannot
expect at this time to get these loans
In . reasonable time ~ they have
Iproven very slow to close up.
ssTho recent law which operates
under the War Finance corporation,
is q new and entirely separate affair.
There Ii q committee at washington
who have q great deal OF authority
In deciding all questions as TO loan
ing to tho farmers. This committee
has appointed a subcommittee OF
fiy0 with headquarters at Boise 10
recommend Idaho business Private
parties cannot deal directly with the
War Finance corporation, but must
deal through some focal corporation
who guarantee 10 the government
lali business going through their
hands. This local corporation can
lbe bank that ID incorporated, a.
stock loan company that ia incorpor-
ated or the farmers can form q new
corporation with paid up capital.
Is Ia generally understood that any
Of these corporations. properly run.
can guarantee from eight 60 ten
ltimes their paid MP capital stock.
After they had made loans ten times
their capital stock they would have
10 increase their capital or stop guar
Ianteeing loans.
"Ts liz the business OF q bank to re-
ceive deposits and make loans. II ID
not in their line Of business to guars
anteo merchant that the farmer
willis pay him his store account, nei-
ther should the bank guarantee 20
the government that the farmer will
nay tho government for the reason
that the bank Is handling the peo-
pies money and II is not deposited
10 take that risk. For this reason
the banks are not assuming this riah
but have gone In with the stockmen
and formed corporations to handle
this business and nothing else.
up to date there are two such
corporations available to Bear Lake
stockmen. The Bankers Loan Com
pany of Salt Lake was the first in
/. tho field and have had an inspector
here counting the stock. This com
j pany ia differed by some OF the best
business men OF Utah and ia trying
to assist stockmen In the four near
by. states. Idaho has several small.
ar companies each one dealing with
!. their local condition, and ali OF these
+ smaller companies dealing through
i 1.-THE Boise committee. The one oper
D ating In sections with conditions like
!. Bear Lake. In the Southeastern Ida
no Livestock Loan company. with OF
fices ut Blackfoot. A member of tn
!. standrod bank Ii president and th,
1 cashier OF the First National Banl
+ ID secretary. The Bank or Montpe
:. lier has taken some applications 10
i stock loans 70 be put through an.
guaranteed by this Idaho company.
There 10 great demand for thi
+ money and the capital stock has D
J. be increased as the loans increase
.. Tho farmer might ask hia friends
r. the storekeepers. doctors, bankers 0
J. even hia lawyer 10 take some Of tn
u capital stock and take o chance o
d. making some money, ~ II no donh
will make money. but he would pre-
badly be told that he Is getting ID
r money and Ii should not be a hard
D. ship on him TO put one tenth of wha
= no borrows back into the capiti
n. stock and thus keeping the ball roi
ing. He IL expected 70 do thia.
These stock loans are general
4. made for one year with the unde
standing that II the security remaIl
oe good It win ba renewed another yea
IN until IL runs three years from u
r. start. These loans may be obtains
Lr. until July 1t. 1929, after whit
iT, time the government quits. Al
lo- limo of credit established BY th
IN time Is supposed to run three yea
from the start. The interest rate
at whatever tha government says.
G. the present time 55ks for mon
ata with the understanding that IL il
ts. run for three years. and 5K for i
ng monthq only. The local c0TpoE
~ tion In authorized and allowed
cir charge - mere o. III ~ u y Tor !
money. 40 this 20 on the entire 10
! > would he profit On The capital sto
agt investment, less expenses. There
as some expenseswhich the borrower B
Irt 10 stand. like recording papers.
The biggest expense being inspection