RURAL CREDITS 785 



cent of the appraised value of the land pledged to run for periods of 

 not less than five (5) years nor more than twenty-five (25) years, and 

 no loan shall be for a less sum than two hundred and fifty ($250.00) 

 dollars, nor for a greater sum than ten thousand ($10,000.00) dollars; 

 and inasmuch as it is the policy of this act to improve and develop the 

 largest possible number of farms and make them productive, the 

 board shall so order and adjust its business as to give preference to 

 those seeking loans of amounts less than five thousand ($5,000.00) 

 dollars. The board shall so provide that loans shall be made only to 

 applicants who offer first liens on perfect fee simple titles, free from 

 courtesy, dower, and homestead exemptions, and in no case shall 

 loans be made for speculation or otherwise than for the following 

 productive purposes, to- wit : 



a) To increase the productiveness of the land mortgaged. 



6) To make useful improvements thereon. 



c) To pay off liens or incumbrances, or to make part payment of 

 purchase price where the borrower is paying part of the purchase 

 money. 



d) Twenty-five (25) per cent of the amount lent may be used for 

 the purchase of stock and machinery. 



SEC. 6. In making loans and taking deeds of trust provision 

 shall be made for the payment of all or part of the loan at any interest 

 period, and for the amortization of the debt by the payment annually 

 or semi-annually of the interest at the rate fixed and small instalments 

 of the principal debt at like periods, and for the payment of J of i per 

 cent to create a reserve fund, all so adjusted as to discharge the debt 

 in the number of years desired by the debtor within the limit hereto- 

 fore mentioned, as, for example: If the loan should amount to one 

 hundred ($100 .00) dollars and be made at the interest rate of four and 

 three- tenths (4.3) per cent, it would be amortized approximately as 

 follows: 



Duration Annual Payments 



5 years $22 . 40 



10 years 1 2 . 40 



1 5 years 9.10 



20 years 7-5 



25 years 6. 50 



If, therefore, the bank should sell the bonds for four and three- 

 tenths (4.3) per cent, and collect \ of i per cent for the reserve fund, 

 the loan would mature according to the desire of the borrower on the 



