The Princeton union., 1922-10-12
Amendment No. 1 Makes Provision
for Establishment of System of
Rural Credits by State.
TOPROMOTE AGRICULTURE
1t is Planned to Make MinnesOta's
Law Similar to That of
South Dakota.

Tea 10 LIle VOCcIS VI Ml4lAlcoOCd aC eAAS
next general election. A portion of
the article to which the amendment
was proposed reads as follows:
"The credit of the state shall never
be given or loaned in aid Of any in
dividual, association or corporation"
If amended, the section will read as
follows:
"The credit of the state shall never
be given or loaned in aid of any in
dividual, association or corporation
except as hereinafter provided. *
Provided, however, that for the pur-
pose of developing agricultural re.
sources of the state, the state may
establish and maintain a system OF
rural credits and thereby loan money
and extend credit to the people Of the
state upon real estate security in such
manner and upon such terms and con-
ditions as may be prescribed by law
and to issue and negotiate bonds to
provide money to be so loaned"
According to the official statement
Of Attorney General Hilton, "The
purpose of the amendment is to de.
velop the agricultural resources Of
the state by authorizing the lending
of money and credit Of the state tc
the people upon real estate security
If the amendment is adopted the
legislature will be authorized to enact
laws providing for the establishment
and maintenance of system Of rural
credits. By issuing bonds the state
will be able to secure money to loan
the people Of the state upon real es-
tate security. There will be no limit
of Indebtedness that the state may
incur as it may negotiate as many
bonds as it deems advisable.
While no one can predict just what
legislation will be enacted if amend
ment No. 1 is adopted, it is generally
believed it will be similar to the rural
credits law passed by the legislature
Of South Dakota in 1921. That law
has been in operation for more than g
year and seems to have given much
satisfaction.
Secretary of State Burkhart OF
South Dakota, in reply to a request
Of the editor Of the Union for a copy
of the rural credits law, stated he
would be much pleased if Minnesota
could adopt a similar measure as he
believed it to be most worthy piece
of legislation and one of vital impor.
tance to the farmers, especially during
the stringent times through which we
are just passing.
For the information of it's readers
the Union gives the following sum
mary of the rural credits law now ir
operation in South Dakota. The
measure was enacted for the purpost
of fostering and encouraging agricul
ture.
The law provides that the boarc
which is to establish and maintain thu
system of rural credits shall consis
of five members, the governor of thu
state, who shall be ex-officio presiden
of the board, and four members to bt
appointed by the governor. The -four
members to be appointed shall bt
citizens of the state, persons of ex
perience in finance, loaning money
and determining real estate values ane
shall be so selected that the board will
not be composed entirely of member:
of the same political party. All mem
bers of the board shall be paid sal
aries allowing adequate compensation
for their labor
This board of rural credits is to re-
ceive applications for farm loans ant
to borrow money on the good faitl
and credit of the state to pay the
loans approved. The board shall have
the authority to issue warrants o.
bonds payable by the state and sci
the same as may be necessary for tht
transaction of it's business. Tn,
amount of cash the board has in bank
together with the mortgages out
standing must never at any time b.
less than 95 per cent of the amoun
of bonds issued.
Each loan shall be secured by frs
mortgage on the farm land. "Ever!
such mortgage shall contain an agree
ment providing for the repayment O.
the loan on an amortization plan b!
means of annual or semi-annual in
stallments so computed as to pay tht
interest on the loan according to tn
terms of the mortgage and also sucl
amounts to be applied on the princi
pal as will terminate the debt within
an agreed period of not less than fivt
years nor more than thirty years."
"No loan shall exceed seventy per
cent of the value of the land as ascer
tanned and fixed by the board, plu.
forty per cent Of the insured value o.
the improvements"
"The amount of loans to any ont
borrower shall never exceed a maxi
mum sum of ten thousand dollars mol