34 BULLETIN 1295, U. S. DEPT. OF AGRICULTURE 
Some concerns prefer to embody in their contracts a requirement 
for payments beginning the first year. Some of the very best colon- 
izing has been done under such contracts, the companies granting 
extensions freely to all deserving settlers. These companies justify 
this practice on the score that it is well to have the settler under ob- 
ligation to them, that it compels him to keep in touch with them and 
report his progress. The only objection is that some settlers prefer 
to stand on their own feet, arranging their affairs with the company 
in a strictly business way. This implhes a contract which they can 
reasonably be expected to carry out and a 5-year contract with equal 
payments is not such a contract in a large majority of cases. 
The most liberal contract written by any of the companies studied 
is one running for 13 years with no payment on the principal for 
the first 5 years. Almost as liberal is the contract of another com- 
pany, granting exemptions for 5 years on both principal and inter- 
est, but running for only 10 years. The 10-year contract with 1-year 
exemption written by another company is also reasonably liberal. 
A long-period contract reduces the payments to an amount so small 
that the settler will frequently be able to meet them. Even long- 
period contracts should provide exemption at least from payments 
on principal for the first three years. 
For many of the companies that are buying the land they colonize, 
the period of the contract is largely nominal. It is expected that the 
settlers will make such improvements on their farms that by the end 
of the exemption period the company will be able to sell or use as 
collateral a mortgage against the farm for the full amount of the 
original indebtedness. Such companies never expect the settlers to 
make any payments on their contracts. That their expectations 
were being realized is witnessed by the fact that all but 2 of 42 set- 
tlers on one project using this method had secured title subject to 
mortgage in five years or less; and upon a still newer project nearly 
as high a proportion had secured titles subject to mortgage in less 
than three years. Probably such mortgages have not of late been 
accepted as collateral as freely as during the inflation years, 1917 to 
1920. ‘The only reason for naming a period in a contract under such 
circumstances is that a contract must have a period, and the only 
reason for making it for as short a period as five or seven years is 
that it may act as a sort of penalty for the settler who does not clear 
the land as rapidly as he should. No company can be sure that it 
can sell mortgages of this sort whenever it wishes, hence it may not 
even mention the mortgage arrangement in the contract it writes. 
None of the companies adhered strictly to one form of contract, 
which is no doubt wise. For example, most companies would make 
more liberal arrangements in the matter of payments if the settler 
made a large initial payment. A frequent arrangement in such cases 
was “any payment at any time” within three or five years. Most of 
the companies would lengthen the usual period rather than lose a sale. 
A few companies wrote some contracts calling for monthly or 
quarterly payments. The land in such a case is made a sort of sav- 
ings proposition. The buyer meets the payments out of wages 
earned in the company’s sawmills and camps or on some job in the 
city. 
The amounts of the annual payments called for ranged from $50 
to over $700 in a few cases, the variations depending principally 
