64 CAXADA - CREDIT 



3) To provide buildings and enable improvements on the land — the 

 term " improvements " to be defined by the board. 



4) To liquidate the existing debts of the owner of the mortgaged 

 land, or debts hje subsequentlj^ incurs for the purposes which have been 

 cited, the board at all times first approving such expenditure. 



Some especial provisions cf the scheme will now be given. 



The smallest loan that will be granted is one cf $500, the largest one 

 of $10,000. None will exceed 50 per cent, of the value of the land as ap- 

 praised for agricultural purposes, its earning power being principally con 

 sidered in appraising. No persons except farmers, actuallj' engaged in 

 farming or about to engage in it, will be able to secure loans. No borrower 

 will be allowed to sell or transfer his share in the association, which will 

 remain permanently attached as part of the mortgage transaction. If 

 he sell his farm the board has power to transfer the mortgage and also the 

 shares to the purchaser. If he die the mortgage and shares may go to his 

 heirs. Every applicant for a loan will use a regular prescribed form on 

 which will be stated the objects for which the loan is to be used. Penal- 

 ties will be provided for wilful mis-statements. If any borrower .spend 

 any part of his loan for purposes other than those specified in his appli- 

 cation, or violate his mortgage contract in any way, the board will have 

 power to declare his mortgage due and payable at once. All payments 

 on the mortgages will be made on i Decem.ber, thus falling due together 

 and so reducing the work of administering the scheme. The date is 

 chosen as being that most convenient to farmers. It is the plan to charge 

 8 per cent, interest on all overdue payments. All mortgaged buildings are 

 to be insured to the board's satisfaction. 



lyoans will be made only for term.s of twenty, thirty or forty years, the 

 principal and interest to be repaid in annual instalments adjusted according 

 to the t'^rm. Thus a $1,000 mortgage for twent}^ 3'ears will entail a repay- 

 ment of $87.22 a year, for principal and interest, and this will discharge 

 the entire obligation in the twenty years. On a thirty year mortgage of 

 $1,000 the annual pajanent due will be $71.02 ; on a forty year mortgage 

 of $1,000 it will be 63.27. 



The following table shows the annual payments due for a thirty year 

 mortgage. 



