The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1923-06-01

Tor the Use of the money. He then
credits Mr.. Smith with the proceeds
of the note. or $495. When the note
Is due in sixty days Mr.. Smith has re.
ce1ved payment from his customers,
and he pays the bank $500. The
bank marks the note paid and returns
1t to Mr.. Smith.
II Mr.. Smiths business condition
were not sufficiently strong to war
rant granting him unsecured credit the
banker might say to Mr.. Smith, II want
to help you, but you will have to get
the Endorsement Of your friend, Mr..
Jones'" Jones is known to the bank
er as very reliable and responsible
business man. Should he be willing
to help Mr.. Smith he will write his
name on the back of Mr.. Smiths note
and II Smith cannot pay the note
when due Mr.. Jones will have to pay.
In another case the banker, still
anxious to help Smith, hight say, II
am willing to loan you up to $4,000,
but you must secure the loan with the
goods which you purchase for that
amount and with some additional
goods" Mr.. Smith would have to
warehouse the merchandise used a.
collateral in such q way that 1t might
be easily identified through ware.
house receipts as being the banks
property until the note Is paid. II
Smith finally found himself unable to
pay, the banker could sell the NOR
chandise and use the proceeds to pay
the note. If the goods brought moro
than the amount of the note the bank |
would pay the excess to Mr.. Smith;
II the amount were not enough the |
bank would look to Mr.. Smith to
make good the difference.
Mortgage Loans
Loans against farm lands, called
mortgage loans. are frequently made
In country districts. II Mr.. Smith,
lacking an indorser or sufficient col.
lateral or business standing, owned .
farm free of debt he might give Q
mortgage on 1t as security.
The procedure would be somewhat
different from loaning against mer.
,handise. The law, realizing the use
'ul place farm and home owners oc-
,upy, protects them IL a special man.
Ter. 1t says to the lender, in case of
lefault on a mortgage loan, you
must give this owner Of land one
ear after serving notiCs that you ex-
'ect to sell his land to pay the
Mortgage and redeem the debt" This
, called the period Of redemption.
Mr.. Smith has still another method
pen to obtain funds from his banker.
lie has sold, say, $500 bill of mer-
handise to Mr.. Brown, dealer in q
mailer community, who must sell
lie goods to his own customers be-
IRE he can pay Smith. Smith says to
rown: III you can't pay cash give
70 a ninety day note. I will discount
and get immediate cash on it from
y bank. I will have to pay 6 per
mt interest to do so, and shall
ant you to pay that interest," Mr..
rown agrees and makes his ninety
~ note for $500 with interest at
r cent Mr.. Smith takes this note
the bank, which advances him
edit for $500. When the bank col
cts the note from Brown ninety
lys later 1t receives $5075O, tho
ded $3.50 being the per cent in
rest charge for the use meanwhile
the money for the ninety day pc.
I'd Of the note.
These are the various ways in
itch the bank serves its community
placing, through loans, the accu-
Hated thrift CT the community at
3 disposal of business and industry.