2-18 



THE IRRIGATION AGE. 



Trust Company, which acts as trustee for the bond 

 holders. For each $1,000 bond issue there usually is 

 deposited with the trustee $1,500 in these mortgages on 

 fertile agricultural lands. 



For illustration Suppose the owners of farms 

 mortgage their land for one-third of its value to obtain 

 a water right. Then these mortgages are deposited 

 with the trustee at the rate of one and one-half to one, 

 to secure the bonds. That means that for each $1,000 

 bond the trustee holds farm mortgages to the value of 

 $1,500. And those mortgages cover farms worth three 

 times as much. Then back of each $1,000 bond will 

 be first Mortgages on land worth $4,500. 



In buying a water right for his land, a farmer is 

 required to pay 10 per cent cash. He agrees to pay the 

 balance in nine annual payments with interest. The 

 mortgage on his land is given to secure this agreement. 

 That is why Irrigation Bonds are usually issued with 

 serial dates of maturity. The payments made by the 

 fanners are used to retire the bonds as they fall due. 

 This is a far better plan than the accumulation of a 

 redemption or sinking fund as employed in some other 

 forms of bond issues. The proportion of security in 

 the hands of the Trustee is always maintained until 

 the last bond is paid. 



As the early bond maturities are paid, the security 



Cabbages, Melons, Squash, Sugar Beets, Onions, Turnips, Egg Plant, Cauliflower, Grain and Alfalfa all these grow in the Denver-G 



district, and find a market right at farmer's door at top prices. 



Greeley 



That would seem to be ample security. Yet the 

 bonds are additionally secured by a first mortgage on 

 all the property owned by the Irrigation Company 

 which issues them. As the proceeds of bond issues go 

 into the property, this mortgage on the Company's 

 property is a material consideration. 



These farm mortgages are not usually given by 

 owners of large tracts of land. In these irrigated 

 regions, farm land is exceedingly fertile, and small 

 farms intensively cultivated are the rule. A few own- 

 ers may give mortgages on 160 acres, hut far more are 

 owners of 10 and 20-acre tracts. 



behind the balance, of coiirse becomes more and more 

 ample, for the reason that the mortgage is not released 

 until the entire debt is paid. 



SUPERIOR TO FARM MORTGAGE SECURITY. 



It will be noted from the above facts that an Irri- 

 gation Bond has the strength and security of a con- 

 servatively margined farm mortgage combined with all 

 the advantages of corporate responsibility. It would 

 be hard to conceive of a more attractive form of in- 

 vestment than well selected bonds of this class. 



Farm mortgages, issued not to exceed 40 per cent 

 of the value of farm land, are rightly considered a first- 



