The Eureka sentinel. [volume] (Eureka, Nev.) 1902-current, 1921-10-08
NO LOANS ON LAND IS
COMMITS STATEMENT

OofHtf atfo "Aa~a
to the rsnchers and -stockgrowers.
will not loan q cent upon lands, was
1.-THE statement made in Elko last Tues
day by Representative Fletcher. who
arrived here on that day from San
| Francisco for consultation with the
heads Of local banks, says the indie
pendent. No funds will be advanced
| upon any other security than live
stock. Livestock includes cattle.
sheep. horses, hogs, etc.
The method by which the corpora
ton advances its funds is stringent.
The Government has 30 arranged
matters that II has double security. a
chattel mortgage from the person
borrowing the money and a note from
the bank with which the funds are
deposited for loaning to the individu-
al. Eighty per cent of the value of
the security offered will be loaned.
/ The valuation of the security is fixed
by the Government itself through Its
own appraisers.
To fully illustrate the hammer in
which the loan Is made q concrete
case Is assumed. A desires to borrow
funds upon 500 head of cattle. He
applies to his bank for an appraise-
ment. The bank places the status Of
the security before the War Finance
Board. 1t Is determined that the
cattle are worth $4,000. The War
| Finance Board will loan upon them
/ the sum Of $4,000 or 80 per cent Of
| their value. The loan is consummat-
ed by executing a chattel mortgage
| upon the livestock to the War FL
nance Corporation. This chattel
mortgage is delivered to the bank
through which the loan is made and
has the banks endorsement. The
bank also forwards to the Finance
corporation its note for the amount
advanced bearing interest at six per
cent. The War Finance Corporation
then deposits the amount with the
bank through which the loan is made
and allows that bank to handle the
funds for a margin of two per cent.
or a total interest to the bank of
eight per cent, which the borrower
pays.
1t will be noted that by this method
the War Finance Corporation is doub-
ly secured, holding a chattel mort
gage upon the property and the note
Of the bank az we'll. II the note re-
mains unpaid after maturity the War
Finance Corporation can realize from
the chattel mortgage and II that be
insufficient to pay the note the bank
must make up the balance.
The term of the loan will be in all
three years. The original note is ex-
ecuted for payment in six months but
f the Government agrees to extend the
payment for a total term Of three
years.
No bank is authorized to loan to
any individual any more than to the
amount of ten per cent Of its capital
stock.
Bankers here state that while the
| provisions of the loan will serve to
place some cash available where 9TH
erwise it might not have been placed
in use, nevertheless the terms of the
loans are SO stringent as to prohibit
the beneft coming from the Govern
ment that was at first supposed would
come. Chief among the objections
registered to the terms Of the loan IL
that Of no advances upon lands. In
this section of the country many very
valuable ranches will not be accepted
as security for a cent. A two hundred
thousand dollar ranch property with
one thousand head Of cattle upon II
will be security only for eighty per
cent of the value of the cattle, the
ranch land having no standing before
the corporation as security.
Jerry Sheehan. Winnemucca bank
er. who il in charge Of the loan in this
State. is authority for the declaration
that the loan has done considerable
good in Humboldt County through
releasing considerable private cap
ital in use through forcing q raise OF
market prices for livestock. Eastern
nnanciers have already noted a raise
in cattle. sheep and horse prices on
the eastern markets. 1t is expected
that the loan will advance livestock
values when 1t becomes working gen.
orally over the west.
DR.. J. j. Henderson. representing
the Henderson Banking Company of
this city, will leave to-day for San
Francisco for the purpose Of consult
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