The Fallon standard. (Fallon, Nev.) 1920-1958, 1921-10-12
Government Says
No Loans on Land
Livestock Now To BE Only Basis Of
Security for War Finance
Boards Advances

The United States War Finance
Corporation which Is advancing
funds to the ranchers and stock
growers, will not loan a cent upon
lands, was the statement made last
Tuesday by Representative Fletcher,
who arrived at Elko on that day
from San Francisco for consul
tation with the heads of local banks.
No funds will be advanced upon any
other security than livestock Live
stock includes cattle, sheep, horses,
hogs, ETC., says the Independent.
The method by which the corpor-
alton advances its funds is stringent.
The government has so arranged
matters that it has double security,
chattel mortgage from the person
borrowing the money and a note
from the bank with which the funds
are deposited for loaning To the in
dlvidual. Eighty per cent of the val
ue OF the security onered will be
loaned. The valuation OF the secur-
ity is liked by the government itself
through its own appraisers.
10 fully illustrate the manner in
which the loan Is made a 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 so per cent
OF their value. The loan is consum-
ated 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
benk 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 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 meth
cd the War Finance Corporation is
mortgage upon the property and the
note of the bank as we'll. If the note
remains unpaid after maturity the
War Finance Corporation can realize
from the chattel mortgage and if
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
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 benefit coming from the govern
ment that was at first supposed
would come. Chief among the OBJ
jections raised to the terms of the
loan is that of no advances upon
lands. In this section of the country
many very valuable ranches will not
be accepted as security for cent. A
two hundred thousand dollar ranch
property with one thousand head of
cattle upon 1t 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 is in charge of the loan in
this state, is authority for the dec
laration that the loan has done con-
siderable good in Humboldt county
through releasing considerable pri-
vate capital in use through the
banks and placed upon security that
has dropped in value recently. Its
principal benefit 1t is said, is through
forcing a raise of market prices for
live stock. Eastern financiers have
already noted raise in cattle, sheep
and horse prices on eastern mar
kets. 1t is expected that the loan
will advance live stock values when
it becomes working generally over
the west.
DR.. ]. j. Henderson, representing
the Henderson Banking Company of
Elko is in San Francisco for the pur-
pose of consulting with representa-
tives of the War Finance Corpora
tion in an attempt to secure some
what more liberal terms for Nevada
loans.
WEATHER REPORT