The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1866-08-25
4ithmond nispatth,
NEUTRALITY-SUSPICIOUS. 25, 1866.
The Loans on Real Estate.

The Loans on Real Estate.
In the article on this subject published
in yesterdays Dispatch we omittedto state
how the Loan Company that was to make
loans to agriculturists, according to the
German system, was to be organized. Inc
patrons Of the scheme here proposed NV"
loan mpanics-one restricted to loans 0"
real estate in cities, and one to loans on
real estate in the country. they were "
have a regular charter, with limitations OF
-capital. and such regulations as might DC
deemed proper, and the stock to DE taken
unaer such rules as might be determined
upon. In all this there must oil COURSE o'
differences of opinion and different pt'hs
nroposed. Most people, however, "onia
incline to making the institutions demo-
cratic by fixing the value of the shares at
a low rate, say twenty-five dollars each.
We imagine there would be no design to
make such institutions banks of circula-
ton. That would be bar to the success
of the scheme, as the paper manufacturing
machines are, and have been, in excess in
this country.
But the manner Of the organization of
the company being settled, and it being
chartered, it proceeds to lend money to
landowners in the manner briefly stated
by us yesterday. There are a great many
things to he considered in the matter Of
regulating the bank. But as to the gene
raj principles of the system Of loans to
agriculturists TO relieve the country after
the exhausting war we have just passed
through, there can be no difference of opin-
ion. The Legislature should not hesitate
to give any body Of men an act of incorpo-
ration who proposed this.
We see that Mr.. WuLorGHnY Newton,
of Wcstmorcland, in letter addressed to
Mr.. W. II. MAcrARLAND, published nyes-
terday's Wig, advocates the Introduction
of q plan pursued by some Of the banks III
Scotland, as described in ADAM SMITH
Wealth of Nations. This plan was to per-
nit farmers to deposit security in bank
for q specified sum, and their checks to be
honored until the aggregate so secured
was drawn out. The advantage in this was
that the borrower paid no interest until
his check was entered on the books OF the
bank, and then only for the amount 50
checked out. These loans were for liberal
periods, suited TO the wants Of the farmer
but then they were not permanent loans
for long term of years, and ultimately"
be liquilatcd by the sinking fund taken
ont Of the interest, as in case Of the
German real estate loan companies.
Mr.. NEWTON is apprchcnsivc that money
is not SO abundant and not to be obtained
in supply sufficiently copious to justify
men in making "permanent Investments
by which we suppose lie means loans for
the long periods, according to the German
system.
Here lies the difficulty in both these
plans. Commerce has the first claim upon
capital; or rather capital finds its most
ready and profitable employment in COM
merce, and is not likely to seek other
modes Of investment as long as it can find
employment in that. These real estate
loans are most common in old communities
Of the most settled habits, and possessing
the largest amounts Of capital. In new
country like this, with so many new fields
Of enterprise constantly developing them
selves, it is not so easy to dctain capital in
the quiet and steady employment of long
loans, at moderate interest, secured by real
estate.
Still the experiment is interesting, and
the demand for aid to the agriculture of
the country, so seriously crippled by the
war, is very urgent. The form of security
10 he given by the landowners in Virginia
would he entirely reliable. Indeed, the
security under the aid of the loans would
be steadily growing better. 1t is possible
that with this view of the substantial and
constantly improving character of the Sc
curity money might be attracted from
abroad. That is tho only ground of hope
for the success of the several schemes.
We may form very beautiful theories on
the subject; but without the money they
end i'll nothing.
Yet it is proper TO discuss the measures
of relief for the most important as well as
the most distressed and most depressed
interest in the land. The citizen can in
no way be better employed than in endea-
voring to find relief for this interest. The
laudable eXcrtions with this view may re-
salt in success, and all who may have con-
tributed to it will indeed be their coun-
try's benciactors.
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