The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1890-08-17
THE LOAN COMPANIES.
A PROSPEROUS BUSINESS REPORTED
IN THIS DIRECTION.
A Brief Review Of the Loaning Inter
ests in Sedgwick County and Touch
ing Upon Many Things Relative to
This Business---Comment by
Disinterested Parties,

The man of wealth who has grown old
surrounded by all the comforts of a New
| England home does not emigrate, but his
| boys with youthful enthusiasm. brains
| and muscle as their capital stock seek
cheap lands in Kansas. With the break
ing of the sod and planting, the lands are
| doubled in value. There are three ele-
| ments essential to success, labor, land and
| capital The new settler is supplied with
the first two. The third element is in the
possession of the conservative New Eng
Lander and is offered the settler in ex-
change for mortgage on his farm. He
borrows, not from actual necessity, but as
matter of business. By borrowing
money at g or z per cent he can increase
the area of his cultivated land, build
fences. barns or a comfortable home for
his family and at the maturity of the loan
be IN condition either to repay it or re-
new for another term with profit to him
self and safety to the lender.
The distance between the lender and the
borrower and the rapid development
OF the new west made necessary some con-
venient and safe medium through which
the exchange of capital and security could
be made. To meet this demand the mort
gage loan companies were organized. The
enormous growth and demands of the bus
mess naturally induced many scheming
and dishonest or careless men to engage in
the business, with the result that many
bad loans have been made and numerous
losses have followed. In proportion, how
ever, TO the extent of the business and the
number of persons engaged, the bad loans
and bad loaners have been small. The per-
centage of foreclosures in proportion TO the
loans made is smaller in Kansas than in
New England, and the percentage Of fail |
ures among loan companies has been less /
than that among banks. No colony for |
loan officials has yet been established in |
Canada. A glance through the manage |
ment of the loan companies today will re-
veal men of the highest business standing |
and integrity.
There can be no better indication of the |
status of country than the operations of !
the loan companies. 1t is their business
to know exactly what the actual condi-
tons are and they are experts in estimat-
ing prospects. Their disposition to make
long time loans is founded on the fact that
such securities are more desired by eastern
The only conclusion to be
trawn from this circumstance is the fact
hat confidence in the outcome of the west
s gradually gaining strength. There is
also tendency toward a decline in the
'ates of interest and this will be more ap-
parent as outside companies come into this
ield TO compete for business. A promi-
lent loan man said the other day that his
company did not have a five
ear loan on their books that they
would not gladly renew at even
/ less rate of interest. They con-
ider that from year to year their security
las improved, and at 5 per cent per annum
he increase would be conservative esti-
nate.
There are twelve home companies, be- {
ides number of outside companies, rep
esented by agents, doing business in this
ity, and as their field of operations extend {
yer about half of the state, the amount
f business done by them, in the aggre-
ate, is very large.
During the last year the number of q
Mortgages released was largely in excess
+ the amount made, yet there is little {
respect that the business will greatly de-
line in volume for some time to come on
count of the opening up of new farms
nd added improvements on the old ones.
lew men, with newer farms, can now
lake loans on favorable terms on account I
f the success the companies have had
18th men who were similarly situated five d
ears ago.
Western securities are becoming more
property in the east every year, /
hich fact is one Of the strongest argu- 5
lents used by the immigration agents.
nut for the help of eastern capital one L
alf of the fertile farms of Kansas would t
,day be unbroken prairie, and the census e
list being taken would not show one-half e
the present population; and while east s
n money was developing the west, the p
nder was receiving a benefit through t
tie of interest donbe that which he t
,uld have obtained at home. t