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Show Ufe Bulletin Gives Comprehensive Explanation Of Credit Operations Now fn Effect !n Tribe (From The Uie Bulletin) The one million dollar Ute credit program was recently put into active operation with the establishment of offices in the basement of the Agency office, where Paul J. Corwin, credit officer, and members of the credit committee are busily processing and reviewing a flood of loan applications for the establishment of business enterprises, buying of land and cattle, building homes, education educa-tion and other purposes aimed at utilization of reservation re-j sources and to assist ambitious Utes in starting business opei-ations. opei-ations. The new Ute credit plan is j part of the overall Ute program which is to promote industry and livelihood among the Utes. It provides the necessary capital cap-ital which cannot be secured through normal credit channels so that those who have the determination de-termination and the desire to start their individual enterpris es will not be stymied by lack of credit. The credit program, financed by the Utes own funds, is a recognition rec-ognition of the fact that all Indians generally have difficulty difficul-ty in securing commercial credit available to other groups of people even though they might be just as good or a betiei credit cred-it risk than the average. The situation is usually tn result of the trust status oi toe Indians' In-dians' property and the general I misguided, belief that the Indians In-dians are the wards of the government, gov-ernment, and therefore, are not legally responsible for their actions. The Indian Service in recognition recog-nition of lack of credit of Indians, In-dians, initiated the Revolving Credit Program under the Indian In-dian Reorganization Act of 1934. Money was loaned to' Indian Tribes who in turn reloaned the money to individuals. The Utes have participated in the Revolving Revol-ving Credit Program since 1941 and under it many Indians have been able to successfully start in the stock business and other enterprises. Over a ten-year period some $200,000 has been loaned out. It is generally conceded con-ceded that the loaning program on the U&O Reservation is one of the most profitable and successful suc-cessful activities of the Indian Service carried on locally. I The Ute credit plan operates under the same regulations and rules as the Government sponsored spon-sored revolving credit program, except for certain provisions and policies adopted by the Tribe. These exceptions extend the time limit for repayment on cattle loans from 5 to 10 years; permits loaning for nonproductive non-productive purposes; makes pos sible loans for the purchase of lands and homes with maximum repayment time set at 30 and 25 years respectively; authorizes author-izes the superintendent and the Business Committee to have the approving authority on loans up to $10,000.00. Under the old loan set-up, the superintendent's approving authority was fixed at S1500.00 and any loans beyond that amount had to be acted on by the area office. The area office still retains the approving authority au-thority on loans in excess cf $10,000 and for loans requested by tribal and government employees. em-ployees. The interest rate on most loans is 4, except for educational educa-tional loans which bear 3. Interest rate on non-productive items such as loans for furniture, furni-ture, household appliances, cash loans, etc. will be 8. In addition a service fee of 1 on the total amount of the loan will be charged. This fee is to help pay for the operating expenses ex-penses of the program. Under the old loan set-up, the interest was a flat 3. Th-; reason for the increased rate of 4 is that under the new credit program, the Utes have invested their own money which normally would be drawing interest in-terest at a rate of 4 while deposited de-posited in the U. S. Treasury. In other words, the reasoning was that inasmuch as the rest of our money is deposited in the Treasury and draws 4 interest, why shouldn't money invested elsewhere draw comparable com-parable interest? The interest will help pay for the credit operation op-eration and the unused portion will revert, along with the principal, prin-cipal, to the Ute General Fund whenever the need no longer exists for a private loan pro gram. The higher interest rate of 8 on some non-productive items, except for homes and home repair materials, has been justified because the . Ute people peo-ple will be encouraged to look toward commercial and business houses for credit on furniture, home appliances, etc. And frankly, the high rate of 8 is to discourage them from using us-ing the Ute credit fund for these purposes. It was thought that the credit fund should be used principally for productive produc-tive purposes, to buy land, homes, and other long time benefits rather than be tied up in a clutter of small loans the type of loans which the Indians In-dians can generally secure easily eas-ily through installment buying at local stores. Due to' a demand for recognition recog-nition and to assure the availability avail-ability of a fair share of the capital fund for the full-blood Indians, a stipulation has been 1 inserted in the regulations to assure as-sure the full-blood Utes a proportionate pro-portionate share of the fund, for use as credit. . There have been many misconceptions mis-conceptions and misinformation about the granting of Ioms is usual where communication difficulty is ente a where there is a lack of understanding under-standing concerning the principles prin-ciples involved in any legitimate legiti-mate lending activity. The most important principle involved is that the Utes by Collective action have invested one million dollars in a credit program for use of their members mem-bers who wish to finance the,r business undertakings, and every ev-ery precaution must be taken to safeguard these funds by minimizing risk as much as possible. pos-sible. In order to do this, those who are responsible for the program pro-gram must assure themselves that the applicant is equipped and prepared to make a successful success-ful venture. Sometimes these preliminary investigations concerning the applicant ap-plicant and his proposed pro-, ject is discouraging, but it is very necessary and compulsory on part of the credit officials to do this so that money belonging be-longing to 1700 people can be wisely invested. The technical advice of trained field, personnel in Extension, SMCO, and Credit which often -discourages an applicant ap-plicant is for the applicant's own good and brings to surface many angles which he has over looked or failed to consider. A prime example of this is the man who wants to buy $3000 to' $5000 worth of equipment equip-ment to farm 20 to 40 acres of land. His repayments and operating oper-ating expenses would take just about everything he could possibly pos-sibly make and leave him with nothing. It would be cheaper for him to hire someone with machinery on such a small acreage. ac-reage. The worst misconception of many people is that the credit fund is a private till where any Ute can remove what he wishes any time. It is his money, sc why not? If this were true, the private till wouldn't last 5 seconds sec-onds with 3400 grabbing and determined hands out for what could be gotten. The Ute credit program operates op-erates somewhat like a bank. In it are invested funds be-I be-I longing to the Ute Tribe, or some 1700 shareholders, and these funds are under the cus tody of officials who are responsible re-sponsible for lending it to individuals in-dividuals under certain rules and regulations. Any commercial commer-cial bank operates in about the same way. The bank takes the money placed with it for safekeeping safe-keeping by depositors and loans it out; and when it is loaned out every precaution must be taken to safeguard the depositors deposi-tors money. If it didn't take extra ex-tra care, and therefore made bad loans, the bank wouldn't be able to repay its depositors on demand and would fail as an institution. One of the best down-to-earth comments on the loan program was made recently by one of the old Ute leaders to his people peo-ple which can be summarized as 'follows: "The loan program isn't for a bunch of lazy people peo-ple It is for those who want to get out and work; to make something out of yourselves ana make use of your land and resources. re-sources. You can't expect anybody any-body to give you a loan unless you are doing something which will enable you to pay it back." It was his way of saying that the lending program isn't for those whose only pastime is riding around in "oil money" cars and whose only anxiety and hope is when the next per capita payment will be made. There are many Ute Indians who have the determination, ambition and courage to gain a living independent of the Tribe and the Government. It is hoped that the loan program will materially assist these people peo-ple to reach their goals and all of the Government and Tribal officials are pledged to help every ev-ery individual to successfully carry out his program. |