The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1935-02-08

ocUIeQNeSS OF the department TO the
Bank Of North Dakota.
On the basis Of facts disclosed by
his audit, Diehl explained:
Collections OF interest and
principal on farm loans amount to
very little."
Total administration fees re.
ceived BY the department "will not
begin to cover the cost" Of hand.
ling collections.
Little hope exists that the de.
partment will be able 70 repay
except In part" . $l,lSl,lSO loan
= from the Bank Of North Dakota.
More than $4,000 In taxes
must be paid for the real estate
bond payment fund to retain
possession Of land It owns.
Principal loss to the real estate
bond payment fund because Of re.
financing Of farm loans will have
to be raised by taxation or other.
WISE"
A total Of 1884, 1890 in interest
was collected through federal refi-
nancing Of loans-"a large part Of
which at least might never have been
collected" he said.
Net Deficit Of $lS2,s9l
Although income exceeded expense
in the department by $l45,664 from
August 81, 1888. to October 81, 1894,
a net deficit Of $l82,99l still remains,
piehl said.
A large proportion Of the income,
Diehl explained. represented handling
charges Of refinGnced loans, and will
not be available In normal times"
Expense Of collection Of loans are
heavier than when payments are
made readily, he explained. "Only
1872 per cent Of all loans are in good
standing and 61.6 per cent Of all loans
have three or more years interest un-
paid" he added.
Originally, Diehl said, the one-half
per cent fee charged by the depart
ment for making collections on farm
loans was thought to be sufficient to
maintain the department and pay
operating costs.
mo one realized the present situa-
ton in regards to farm loans would
exist.
Costs Of Operating Grow
The costs of operating the farm
loan department have been increas-
ing apace with acquisition of farms
through foreclosure and deed, and
will necessarily increase in the future
unless conditions change draStically.
"On October 81, 1888, there were
principal balances In open loans OF
$l8,645,594 and $7,O25, 657 in land own
ed, disclosing the fact that 27.37 per
cent Of the money invested In farm
mortgages at this time by the real
estate bond payment fund Is tied up
in land owned, from which there Is
little hope for liquidation at present.
except through federal re-finance.
"On August 81. 1888, 1893 per cent
Of the money invested In real estate
loans was tied up In lands owned,
which shows that the trend is toward
larger percentage Of investment in
lands owned as time goes on under
present conditions.
Need for Remedy Obvious
If all open loan borrowers were
to pay all Of their interest each year.
TIE farm loan department would re.
ceive about $4,000 as an administra-
ton fee. This fee will not begin to
cover handling such collections, and
cost Of managing the 2.200 farms now
owned by the fund. It Is obvious that
some remedy Is needed to provide
funds for costs Of operating the farm
loan department
OF the $1,l9l, 100 borrowed from the
bank by the department to be used
in payment Of taxes, insurance, fore
closure costs, improvements and costs
of operation, there appears to be
little hope the farm loan department
can repay this loan, except in part,
and that over . period Of years"
Diehl said.
Nearly $2,5oo.ooo for taxes. interest
and penalties show unpaid on open
loans, according to Diehl. 1T may
be expected that some Of this will be
paid by the borrowers" Diehl hoped,
but an unknown percentage Of these
loans appears destined to become the
property Of the state. which means
the unpaid taxes then win become
payable by the farm loan depart
lnent."
4,36S Refinanced BY y. 8.
A total of 1895 loans and farms
were refinanced through federal aid,
according to Diehl, with nearly ill.,
100000 received and credited to the
real estate bond payment fund and
real estate bond interest fund. A to-
tai Of 1,l4l 1888 acres Of land were in
volved In the transactions.
Principal loss on refinancing was
4.34 per cent; interest loss sos per
cent and net loss 1888 per cent.
Principal loss averaged 81 cents per
acre, while interest loss per acre
amounted to 81 cents.
This appears to be good show
Ing" Die1l said, "and good business
for tho state Of North Dakota, but
money will have to be raised through