The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-12-11
BONUS LOANS
EXPLAINED TO
WAR VETERANS
Ex.service Men Can Borrow
on Certificates After Janu-
ary l at Banks

Terms under which world war vet
Grams may obtain cash loans on the
adjusted compensation certificates
issued by the federal government
are contained in information recciv-
cd here by Adjutant General G. A.
Fraser.
Under the law no certificate has a
loan value until it is two years old,
consequently the loan privilege will
not be available until after January
l, 1927. Many North Dakota veterans
are expected to take advantage Of
the loan provision ,cf .hc Law to
turn their certificates into cash,
Fraser said.
Loans on the certificates may be
made only by certain restricted fl
nancial institutions. If such loans
are made by an individual the loan
is void and the person loaning the
a federal statute. The law provides
that such loans may by made by any
national bank or any bank or trust
company incorporated under the
laws of any state.
Borrower Gives Note
To obtain loan the veteran gives
q promissory note to the bank ad-
vancing the money. The amount Of
the loan may not exceed 80 per cent
of the reserve value of the certifi-
cate at the end of the current GER
tificate year. Care should be taken
to distinguish between the face
value and the reserve value Of the
certificates, Fraser said.
The rate of interest to be charged
on such loans is limited and may
not exceed by more than two per
cent per annum the rate charged at
the date of the loan for u discount
of 9O-day commercial paper by the
federal reserve bank for the district
in which the bank making the loan
is located.
The bank making the loan may sell
the note to any other bank which
would be authorized to issue the loan
in the first place but not to an in
dividual.
Banks selling such notes must no.
tify the veteran by mail ut his last
known postofficc address.
II note given by a veteran has
not been paid when it falls due the
bank will send the note and the ccr-
tificatc to the director Of the United
States Veteran Bureau at Washing
ton. The director will pay the note
and place the amount Of the payment
as lien against the certificate Of
the veteran. The veteran will have
the option Of paying it at any time.
Six Per Cent Interest
! If the note remains unpaid it
draws interest at the rate of six per
cent, compounded annually, and at
the maturity of the certificate the
director will pay the veteran or to
his beneficiary named in the ccrtif-
icate, the original amount of the
certificate less the accrued value Of
the loan.
In a letter to the adjutant general.
&. T. Hoverson, regional manager of
the veterans bureau at Fargo, has
veterans who are entitled to the ad-
dressed to the adjutant general be
cared for by referring the veterans
to their nearest banker. "Thc banks
will undoubtedly have information as
to this feature Of the law and will
definitely know their rights with re-
spect thereto" he said.
| Opinion was expressed at the ad-
jutant generals office that many
veterans who are entitled to the ad-
justcd compensation have failed to
make application for it. Those who
have not heretofore done 50 are ad-
vised to send in their claims rs
quickly rs possible. Adjustment is
made on the basis of 81 . day for
service in the United States and
3l.26 day for service overseas.
Those having only comparatively
small amounts due them will be paid
in cash, II was said at the adjutant
generals office.