The Nonpartisan Leader Newspaper, August 11, 1919, Page 3

S ' normal course -of events, In the interest of a square deal for the farmers Nonartigan Teader Official Magazine of the National Nonpartisan League VOL. 9, NO. 6 A magazine that dares to print the truth - ST. PAUL, MINNESOTA, AUGUST 11, 1919 WHOLE NUMBER 203 North Dakota Initiates Rural Credits New People’s Bank Offers Farm Loans at Six Per Cent, With Thirty Years to Repay at Seventy Dollars Per Thousand Bismarck Bureau, Nonpartisan Leader. N ALL the business enterprises - ordered established by the leg- islature and the people of North Dakota, an immense amount of work is necessary before active operations can be begun. This is just as true of the Bank of North Dakota as it is of the flour mills.. Such an institution never before existed in America. Forms must be drawn up, policies outlined and every possible con- tingency must be met in advance. The arrangements for one of the prime functions of the Bank of North Dakota are now complete. As soon as the printers prepare the blank forms, the rural credits department will be ready to begin operations. Farm loans are to be made at cost. Loans are to run 30 years at 6 per cent interest. Each pay- ment will include this 6 per cent and in addition 1 per cent more, this latter based on the orig- inal principal. In the this would extinguish the debt in 34 years, but for legal and other reasons the last five payments will be paid in a lump sum, ending the loan in 30 years. This is what is called amortization. Just how the amortized loan works out is shown in the table printed below. On a loan of $1,000, the borrower pays $70 a year interest and principal. As the principal is decreased, the annual interest charge becomes less and the payment on the prin- cipal is increased. The following is a table show- ing the $70 payments of - interest and principal on a $1,000 loan: The rules of the bank for applicants for real estate loans are as follows: 1. The Bank of North Dakota will consider appli- cations for real estate mortgages. Application blanks may be obtained from the Bank of North Dakota, Bismarck, N. D. (farm loan department), upon request, or may be obtained from your local bank. 2. Until further notice applications for loans on farm lands only will be considered. Details for mortgages on other classes of real estate have not yet been forinulated. Ranch lands and city .real estate will not be considered for the present. 3., Loans will be made for 30 years, to be payable on a 7 per cent basis (interest to be 6 per cent). .The payment of 7 per cent of the original amount of the loan will be required annually as an annual l " CAUGHT IN THE TRAP | installment on the loan. The 7 per cent annual installment is sufficient to pay the ‘interest at 6 per cent on the unpaid principal, and to pay an amount sufficient to retire the principal of the loan in 34 years. Any installments remaining unpaid at the end of the thirtieth year are to be included with the thirtieth annual installment, so that the loan will be retired in 80 years. ; 4. Additional payments may be applied on the unpaid principal on any installment date. If de- sired, the whole loan may be paid off on any in- stallment date. Do not confuse the 7 per cent in- stallment rate and the 6 per cent interest rate. The 7 per cent installment rate .includes both the 6 per cent interest rate and a sufficient annual pay- ment to pay off the whole loan within 34 years. That is, the additional 1 per cent on the original amount of the loan, plus the saving in interest arising from annual pay- ments on the principal, will pay the entire prin- cipal within the time stated. To comply with the requirements of law the last four installments will be added to the thir- tieth annual payment so as to place the amortiza- tion period within the re- quirement of 30 years. 5. Installment pay- ments will be made an- nually. Borrowers should anticipate their require- ments to determine whether the annual in- stallment charge will come at that time of the year that will best meet their convenience as to having available funds with which to meet their installment payment. 6. Installments will not be permitted to run past due, except- as provided al) by law in the event of 74 = payments of interest at the rate of 8 per cent. 7. A fee of $5 per “ = 0 $1,000 will be charged by ) ’ 774 &\ { Year due Interest Principal 2 ‘v’v.‘[/ m» the Bank of NO!:th Da- 1920.....$60.00 $10.00 ("//,///424.2 kota (not exceeding $25 1 1921.... - 59.40 10.60 AL L on.any loan), for the 1922...0 58.76 11.2 \ neeti _ 1928. 10 smod i%'%i /[ purpose fth meetn;g ba | .- . . portion of the cost to be Al o+ }352;; gg;gf {2;?3 incurred by the Bank of 5 1021.. 54.96 15.04 North Dakota in investi- 1 e 1929.... 53.10 16.90 . gating the appraisal and ) 1980.0... 5209, 17.91 the character of the loan: | 1932.0. 4988 20.12 This fee will be retained }ggg.. fi.gg g;gg by the bank as a partial 4 1985.... 48.08 23.97 payment for services ren- 4 g%gl.. :;.gg 52‘3}; dered pursuant to law <}~ 1938, .. 41.45 2855 and irrespective of 1989.... _g%g 30.26 whether the loan is - 1941..10 36.00 84.00 granted in full, reduced | f %gfi--»- g?-gg gg.gg in amount or rejected in ‘ . 1944.... 29,51 40.49 full, and must accompany | 3 }g:g gz.gg :g.gg the application. The cost - | o 1947, 2177 4823 sl of making out the loan | }3}3:;;' :}2;3;‘ 2};%3 : 2 —Drawn expressly for the Leader by W. C. Morris. papers will be charged 1950.... 128 5744 For more than 30 years, ever since North Dakota became a state, the profiteers have lived fatly in the _to the mortgagor. - i 1952, .01 5142 6454 larder of the producers of the state. Now that the people set the Nonpartisan league traps to catch these 8. When the applica- . 1958..., : 1.5 26.47 ! tion for loan is received Pests, the rats have appealed to the courts and the people in a futile attempt to prevent the farm-, : ; i ; (Continued on page 14) ers from setting traps for them. And they failed both before the courts-and the people. : S B G )