Section 6.
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The public school permanent fund, the other permanent funds originating in land grants from the United States for the support of higher institutions of learning, and for other state institutions, subject to investment, shall be invested as parts of the Montana trust and legacy fund; so also all other funds in the custody of any officer or officers of the state, subject to investment, that the legislative assembly may prescribe. The separate existence and identity of each and every fund invested and administered as a part of the Montana trust and legacy fund shall be strictly maintained. All investments belonging to the public school permanent fund, except investments in state farm mortgage loans, and all investments belonging to the said land grand funds, shall be transferred to the Montana trust and legacy fund at the full amounts of the unpaid balances of such investments.
All investments of these funds shall be safely and conservatively made. Preference shall be given to long term loans secured by first mortgages on town and city homes or on cultivated and producing farms in this State free from all prior liens and encumbrances, and also to Montana Bonds issued for educational purposes. All such loans and bonds shall be payable on the amortization plan. No loan in which the security is a mortgage shall exceed fifty per cent of the actual cash value of the real estate given as security. No farm loan shall be for a longer period than forty years, and no loan secured on residence property shall be for a longer period than twenty years. No loan secured on town or city property shall be made until the particular town or city and subdivision thereof in which it is located has been accepted and approved by the State Board, having charge of the investment, as permanently established, having an assured future and being in every way safe security for these investments. Investment may also be made in other safe interest bearing securities; provided, however, that no part of such funds shall ever be invested in obligations of the State of Montana, except general fund warrants which will be paid within one year from the time of the investment. No discrimination shall ever be shown for or against any loan applicant; provided, however, that in passing on a loan or investment, consideration shall be given, not only to the ampleness of the security, but also the character an earning capacity of the applicant and to the purpose of the loan; and provided further that so long as the available funds are inadequate to m meet the demand, preference shall be given to the smaller loans. The rate of interest shall always be a reasonable rate, considering the character of the loan or investment, but different rates may be charged for different classes of loans and investments.