Word: loaned
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Dates: during 1980-1989
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...stop teaching. That same year a drought hit much of the South. "We didn't make anything that year," says Cross. "We decided that the only way to hold on was to go into debt for an irrigation system." Cross had no difficulty in getting a $100,000 loan from the local production credit association; his land was valued at up to $1,200 an acre, providing ample collateral. Ruth, a slim, handsome woman, went back to teaching...
...loan Cross had acquired carried an adjustable interest rate, fluctuating from 12% to 13%. He also got another loan, this time from the Small Business Administration. Yearly crop planning loans added to his indebtedness. Much of his small profit went to meeting his interest obligations. "When you have to pay tens of thousands of dollars a year in interest, you can't pay the principal...
...production credit association advised Cross to get longer-term financing so that his yearly payments would be lower. He got a loan from the Federal Land Bank. "We had to borrow from here," says Cross, pointing to one of his fingers, "to pay here." He touches another finger. "Then we borrowed from here to pay here." At the same time, the value of his land was dropping to $600 an acre. His two tractors, bought in 1968 and 1973, were wearing out. But he had paid $13,800 for the last one, and it would cost...
...recession of 1981-82 put the Steffes further into debt. When they could not get a new $100,000 loan to tide them over, they filed for bankruptcy, reporting liabilities totaling $800,000. While the proceeding was pending, they kept farming, grossing at least $200,000 each year, but losing money nevertheless. Last week more than 100 of Steffes' friends lent moral support at a court hearing over $168,000 owed to the local bank. The bank won the right to temporarily seize the collateral Steffes had pledged on the loans...
Under the Government program, if a farmer could not unload his leaf at auction, he could still consign it to a "pool," a farmers' cooperative that borrows money from the Government. The pool would then try to sell the tobacco. If it succeeded, the loan was repaid, but if it failed, the Government ate the difference. The cost to taxpayers was small, at least compared with other farm subsidies: $600 million total between 1938 and 1982. Yet increasingly, foes of tobacco began asking why any tax funds should go to a product that the Government itself says is a health...