The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1932-12-31
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Survey Commission
Declares Program
Points to Disaster

LAS loans are made. they are ex-
| for real estate bonds OF the state, the
loans being assigned to the state
treasurer, and held as collateral for
| the repayment of the bonds against
them.
Borrowers Must Pay
TO permit of payment by the state
treasurer of the real estate bonds and
interest thereon at the specified due
dates necessarily implies that all
mortgage loan payments. principal
and interest, must be made by the
individual borrowers in accordance
with the mortgage contracts. Any
failure in this respect Immediately is
responsible for deficit in the funds
required by the treasurer for pay
ment of bonds and interest" the COM
mission explains.
Theoretically the plan is work
able" the survey continues. "Prac-
tically it has failed to function as
anticipated"
Referring then to the last audit of
the rural credits system by o. B. Lund
under the direction Of the board of
auditors, the commission cites thai
the report shows IAN actual shortage
in interest cash income Of $2,865, 707.-
n, represented by $l.63O,0O0 borrowed
by the state treasurer from the Bank
Of North Dakota on certificates of in
debtedneSs, for the purpose of meet
ing interest payments: $l,O3O,7 81 20
collected from the taxpayers of North
Dakota through levies made for the
same purposes: and $2O4, 926.48 repre-
sented by an overdraft in the interest
cash income fund"
$2,S65,707 In Excess
Since the creation of the rural
credits system" says the report. cash
expenditures total $14,351 ,54O.O8, or
ST. ,707.77 in excess of payments on
loans. In addition to this cash deficit
the Bank of North Dakota, through
its collection department. has ad-
vanced for the state treasurer for
foreclosure costs, taxes and insurance
premiums to protect loans in process
OF foreclosure, the sum of $750.455. O8
Furthermore, it is estimated by Of
ficials conversant with the facts, that
$780, 900 additional will be required
or payment Of taxes on lands in the
process of foreclosure for the purpose
of protecting titles thereto. This
would bring the sum total Of the def
cit to $3,8l6,162.85."
The survey commission, delving fur
Their into the manifestations of the
rural credits system as it affects tax
alton. calls attention again to the in
'creasing amount of land that has
gone from private ownership to state
ownership through foreclosure, and
automatically has been erased from
the tax rolls.
Already, according TO the commits
sion. 387 900 acres of land has become
property of the state THE figure is
constantly increasing" it warns
There has been loss Of $437 ,522.1l
in the operation Of this land by the
state, the governor is informed by the
commission.
1.-THE total of rentals collected Is
$50, 1868. whereas the actual operating
expense in connection with such LANDS
has been $770,89011.'
The commission recognizes the
present agricultural situation as re-
sponsible for part of the actual cash
deficit.
On Accrual Basis
Nevertheless" 1t continues, "the
audit as made on an accrual basis,
shows an enormous deficit. The audit
made on such basis takes into con-
sideration all interest accrued to date
Of the audit. Assuming that this
could in one stroke be converted into
cash and all obligations due to the
state treasurer paid and all obliga-
ton owing by the state treasurer
liquidated. the deficit in the rural
credits system still would amount to
the sum Of $1,052,776.76.
Heretofore, taxes have been levied
for the payment Of the deficit in the
! interest cash income account, Of which
81 ,030, 78l 20 have been actually COL
lected. The levy made for this same
! purpose for the year 1882 Is 81 1907
$4,000, or Al per cent Of the total state
levy.
with the increasing loss Of in
come to the fund through foreclosures
the situation appears to be seriously
menacing one
/ The report shows that 1875 per cent
OF all loans made have been foreclosed