The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1935-06-04
THOU ART WITH MEn
NORTH CARoLINA'S EXPERIMENT Ii
SOCIALISM

North Carolina has concrete ana HI
pressive object lesson as to what happens
when government enters the field OF ousl-
ness, or departs from beaten paths, OF
steps out of its legitimate sphere to 90
for citizens which ought to be
done by private enterprise. The North
Carolina example is cited by The Lexlng,
ton Dispatch in the following paragraphs
Eight years ago the North Carolina legislature
authorized establishment of fund of $4,000
600 to be loaned to World war veterans owning
real estate or to aid them in the purchase of
homes. State bonds were sold and the money
made available. 1t found ready borrowers. Two
wears later the legislature authorized two mil
lions more but the council of state was given
authority to cut the amount. 1t exercised that
authority and sold only 100000 more bonds
The fund was designed to be revolving one
Repayment on principal of loans and the pay
ment of slightly larger rate of interest than
the state had to pay for the money was expected
to provide funds for making additional loans
from wear to year. so that the two and hall
millions might do service of many times that
value.
II is revealed now that there has been nothing
in the till to make loans with for the past two
Gears In fact. there has hardly been enough
coming in to keep up the states interest on the
fund. let alone cut down the principal of the
loans previously made.
Information secured by The News and Observ-
or from the office of the present loan commits
sioner is that 1914 loans we're made. Of this
number $50 have been foreclosed and 131 have
been repaid. The state loan board has just or
dered foreclosure on 25 more of the approx
mately 500 loans that are now delinquent IN
principal and interest. Some of the heaviest
borrowers in the past are said to be men charged
with duties in administering the fund. former
loan commissioner himself is deeply delinquent
in principal and interest Two former loan off,
Gals have been foreclosed.
Consequently it is not strange that liberal
practices were followed in putting out the state
veterans loans fund. Since it was state money
and designed to aid only restricted group the
tendency appears to have been to go beyond the
bounds of private financing liberality. Just how
literally this fund has been administered seems
to be one of the things those now entrusted with
the duty of trying to salvage part of the fund
to apply toward the state debt are trying to find
q
fund quit revolving when it ran out of the orig
inal supply of grease"
1t would hardly be possible to bring tt
public attention anything that more i'm
pressively shows up the weaknesses anC
dangers of State Socialism and of Social
istic schemes than this effort of NORTH
Carolina to. help World War veterans tt
finance real estate purchases.
The State sold S2,5OO,OOO worth of bond
to finance this deal. The figures quoted
from The News and Observer of Raleigh
show clearly that the State is going to los,
mOney-perhaps a considerable sum O
money-in handling this matter. Only 10
of more than thirteen hundred loans hav
been repaid; nearly 800 have been fore
closed, with the prospect that majorit
of those now outstanding will have to b
foreclosed. Foreclosing on real estate is
losing business now, as every intelligen
citizen is aware. q if,-:3~.s
1t will not be known until this unfortun
ate experiment" has been finally close
out just how much the State stands to los
by it. 1t is evident, however, from tn
newspaper comment herewith quoted the
this Socialistic experiment" has been cor
Quoted in accordance with the governin
rules and policies of all such enterprise
Not only have many bad loans been mad
Loans on which the State will lose prat
tically all, or large part of the none
invoi*ed-but We are told that 'forme
S'usTI
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