The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-01-05
FARM LOAN DEPARTMENT

The Bank Of North Dakota operates farm loan depart
msn as Of the ne rs the 70
such mortgages to the state treasurer who holds them
bonds to the bank retaining the mortgages as
security to the bonds rule the bank buys the bonds
such bonds private investors circumstances require
go d this plan the bank has made total Of
the department $922 of such farm loans made
during my administration.
For several years the bond market for North Dakota real
estate bonds had and in the early part
bearing interest as low per cent at Later in 1884,
and the early part Of 1872 the market for North
ment declined in value In 1882 events occurred which
bonds was the Of an issue rural credit reunSs
bonds by the State Of South Dakota at rate high 6h
submission to the two measures pur-
porting to declare moratorium contract debts and taxes
people at the June Primaries The public knowledge Of this
action which advertised throughout country resulted
Che provides that bonds may not be sold below
in the immediate u an ess tie
dustral Commission suspended all farm loan operations
thorzd the Manager the Of North Dakota to make
an application to the Finance Corporation for
loan OF S5ooOO0O0o and to pledge real estate bonds
department to continue farm loan during
moratorium the Reconstruction Finance Corporation
o da e Of PHI until the t
OF this the officers Of the Reconstruction Finance
Corporation indicated their willingness with
application but in view of the forthcoming change in the adj
mnstraon Of the Bank Of North Dakota take place.
the Industrial Commission concluded that it would be I'M
wise TO commit the future management Of the Bank
obligation OF such undertaking, and accordingly the ap-
pication was withdrawn.
The theory Of the farm loan policy Of the state under
which the state has been operating since 1919 that while
the credit OF the state directly pledged by the issuance
OF real estate bonds the income from interest and principal
payments the TAKEN will pay interest and
principal OF the bonds issued therefor and thus avoid any
burden on the taxpayers Unfortunately this theory has not
in mortgage nstamen payments began Immediately in 1919
and continued each year thereafter that between 1921 and
1924 inclusive the state obliged and did proper
t evies amounting to $3.50 10000 in order to obtain the
additional funds to the interest the real g
tate bonds Between 1924 and $780, this department. With
the aid OF the tax leves referred tt
is to the mortgage interest payments received were s
fcent to discharge the full of the bond interest fail
ing due each In $780, there deficit in the nterest
and the state treasurer borrowed funds from the
Bank OF North Dakota to make bond interest
thereafter in 1884, the deficit not having been in
the meantime the Board Of Equalization made tax lew
OF in accordance with the provisions Of the law
in such cases. In the period between July 1881 and u,
1882 the shortage in the mortgage interest collections BE-
came SO large that the state treasurer comneled to In
crease her borrowings for bond interest to
This condition obliged the Board Of Eouaza
ton to include in its 1882 tax levy further sum of 81
tor the real estate bond interest fund This brings
the total Of tax eves made to date for estate bond in
erest up to During 1881 and 1882 denouen-