U.S. total.

$1,369, 587, 282

$1,367, 584, 362 $1,050. 364, 866

$986, 019, 149

$97, 442, 957 $1,083, 462, 106

$9, 014, 510

$1,452, 314

$371, 098, 389

93.9

SOIL AND WATER CONSERVATION LOANS

During the 1958 fiscal year, a total of $5,500,000 was available for direct soil and water conservation loans. In addition, an insured loan authorization of $25 million was available. A total of $4,563,096 was obligated for direct loans. Insured loans during the year totaled only $1,170,300. While there was a shortage of funds for insured loans during most of the year, the fact that not all of the direct loan funds available was obligated shows that the lack of applicant demand was the principal factor causing the reduction of 40 percent in total loan volume below 1957.

The adequacy of funds for insured loans has changed from month to month. However, on December 22, 1958, the interest return to the lender was increased from 31⁄2 to 4 percent. This is expected to provide ample funds.

1. Use of loan funds

Soil and water conservation loans continued to be made in 1958 primarily for irrigation and domestic water purposes. The amount of loan funds used strictly for soil conservation purposes was relatively small.

In 1958, about 70 percent of the total amount loaned to individuals was used for irrigation facilities, 5 percent for domestic water supplies, 10 percent for soil conservation practices and for the purchase of machinery and equipment to be used for construction and development work in connection with such soil conservation practices, 4 percent for drainage, and 10 percent for pasture improvement. Of the total amount loaned to associations, 46 percent was used for domestic water supplies, 44 percent for irrigation, and about 5 percent for the purchase of machinery and equipment to be used for construction and development work in connection with soil conservation services. Individuals receiving loans planned to irrigate about 48,000 acres and improve about 13,000 acres of pastureland. A substantial portion of the total direct and insured loans was made in the Eastern, Southern, and Midwestern States which were not covered by the program prior to its extension under Public Law 597, approved August 17, 1954. The total amount of direct and insured loans for the fiscal year 1958, in the 17 Western arid and semiarid States was $4,240,087. Loans in all other States and Territories which were not previously covered by the program totaled $1,493,309.

2. Applications

During 1958, 1,802 applications for new loans from individuals and 65 applications from associations were received. On June 30, 1958, there were 591 applications from individuals and 89 applications from associations on hand. Applications from individuals in 1958 were about 59 percent under the 1957 applications, while applications from associations decreased from 109 to 65. The annual volume of applications for soil and water conservation loans has proved to be very unpredictable. However, judging from the amount of rainfall experienced in many areas of the country in 1958, a continued decrease in applications in 1959 seems likely.

3. Number and amount of loans

The following table shows the number of both direct and insured soil and water conservation loans made in fiscal year 1955 from September 17, 1954, in fiscal years 1956, 1957, and 1958, and estimated for fiscal year 1959. The numbers and amounts of direct loans for fiscal year 1955 include 520 initial and subsequent water facilities loans for $2,608,589 made prior to September 17, 1954.

Water facilities loans to individuals made prior to September 17, 1954, are on a principal maturity basis with payments scheduled during the year when agricultural income is normally received. Water facilities loans to associations while previously set up on this basis, recently have been converted to an amortized basis. All soil and water conservation loans to individuals and associations are on an amortized basis with annual payments due January 1. The following is a status of accounts reported on the basis of maturities and on an amortized basis as indicated.

Maturity basis-Paid-up borrowers and borrowers owing balances

Water facilities loans to individuals as of
June 30, 1958.

Loan advances

Ratio of Matured Principal Interest principal principal repayments payments repayments to matured principal

$29, 763, 955 $22, 013, 074 $21, 532, 475 $3, 020, 495

97.8

From inception of this new program on September 15, 1954, to January 1, 1958, 7,158 direct and insured loans to individuals had been made. On the same date 811 borrowers had paid in full their principal indebtedness of $2,948,362 and. had made interest payments of $172,951, including insured loan charges. Of the 6,347 borrowers receiving loans of $32,515,484 who still owe balances, 1,339 were ahead of their scheduled payments, 1,642 were behind their scheduled payments, and 3,366 were on schedule.

As of January 1, 1958, direct and insured loans had been made to 110 associations. Three associations borrowing $12,950 had paid in full. Of the 107 associations owing balances, 27 associations were ahead of schedule, 35 were behind schedule, and 45 were on schedule as of January 1, 1958.

See tables III, IV, V, and VI for distribution by States.