Capital journal. (Salem, Or.) 1919-1980, 1922-05-03
KAN PROM|SE|SU|T To TEST.
of SURRENDER|BONUS LAW is
UNFULE|LLED|HEARD TODAY.
Circuit Judges Reserve
Decision After Hear
ing Arguments Relative
To Appraisal Clause.

To Appraisal Clause.
Arguments in the friendly suit
instituted by the American Legion
Post No. 8 Of Salem against the
veterans state aid commission for
a construction of the law relating
to the rs per cert loan provision
of the bonus act, We're heard by
Judges Bingham and Kelly, who
took the matter under advisement
before granting the writ of man
damus this morning.
Roy F. Shields, Salem attorney
representing the American Legion,
in presenting the arguments Of
the ex-service men stated that to
loan one applicant rs per cent Of
the appraised value and to deny an
other applicant loan of not more
than rs per cent was class dis
elimination left to the arbitrary
whims of the commission.
Holds Appraisal Binding.
'The act provides for appoint
ment of appraisers said Shields,
in making his argument. THAT
their appraisement was not In
tended to be advisory only, is
clearly shown by the fact that the
amount Of any loan de-
pends absolutely upon the ap-
praisers' report even though the
might actually believe
the security offered to be worth
three times the appraisement
made. If this apprafsement is fin
al as to maximum of the loan, and
there was an intent to make 1t less
binding as to the minimum, the
act would certainly have SO
stated"
Mr.. Shields admitted that the
commission had right to make
rulings governing the appraise-
ments, but when an appraisement
was made in accordance wil4
these rulings, it was absolutely
binding.
Operation Explained.
I Pointing out that the legisla-
ture In passing the act that loans
made would approximate rs per
cent of the value and in many in
stances be considered below the
of ordinary commercial
loans, Mr.. Shields referred to sec
ton II of the law which requires
that on sale of any land mortgage
to person not entitled to loan,
the principal shall be paid down
to so per cent Of the original loan.
"If rs per cent of the appraise-
ment amounts to the original loan,
and it is paid down to so per cent
under this section the principal
would thereafter be As per cent Of
the appraised value. or the GUS
tomary proportion observed in
commercial loans," said Shields.
"On the other hand, the loan
would have to be paid down to 20
per cent of the appraised value, a
result clearly not contemplated by
the trainers of the act.
Loan Object Defeated.
Section 1 provides that the pur-
pose of the loan is to enable the
applicant to provide home. For
this purpose and acting on the
common Interpretation placed up
on the act before and after its pas
sage numerous applicants have
purchased property for homes ex-
pecting to get a loan of 10 per
cent of its appraised value. A loan
OF SO per cent or less is of no use
to them.
I'm other words, a person who
is homeless, neither has the finan-
eial standing required by the COM
nor the real property of
twice or three times the value of
the amount of the loan, and as a
result cannot use a loan for the
purpose intended and therefore, SO
far as saving the state money, it
is obvious that if the applicants
do not obtain satisfactory loans
they will all elect to take the cash
bonus. with the result that the
money expended by the state, if
that course is taken, will far ex-
ceed that required to make up the
few losses. If any sustained, IL the
proper construction is adopted.
]. A. BENJAMIN presented the
states side of the case and point
ed out that many of the soldiers
who were entitled to only $50
cash bonus were permitted TO take
the loan to the limit.
Brazier c. Small and Robin d
Day we're associated with Shield
in presenting the case.