The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1890-01-01
THE FIELD FOR CAPITAL
Western Mortgages ~ . Financial In
vestment-Naturai Resourcessof
Washington.

Western MORTGAGES have Of late years
proved fruitful topic oil discussion in
financial circles. Those writer's who have
attacked them have in general fallen into
the error OF making sweeping assertions
based upon exceptional cases or upon
superficial investigation OF facts II Seens
idle TO argue that q mortgage upon real
estate may not be as secure in one locality
rs in another. provided it be made with
equal care and upon an equally conserva-
/ tive valuation. Western mortgages as
such are not open 70 candid criticism.
The manner in which they are made. how
ever. may be. II loan be made upon
farm in Washington. for example, after a
careful examination Of the title and ct an
appraisal based upon conservative .esti-
mate of its productive power and its actual
market value. it would seem 10 be equally
as sale and desirable as q similar loan
made in Massachusetts,. New York or Penn
sylvania. 1t may, indeed, be said TO be
more desirable because more remunerative.
Just here, however, is the alleged difficulty
with Western mortgages. borrowers can
not. it Is claimed, afford to pay a certain
rate Of interest in the Eastern states.
Therefore they cannot afford to do so in
the Western states. Could any argument
be more absurd? The current bank rate
for the most approved commercial paper in
many OF the Western states is s, and 10
per cent The average rate in New York,
Philadelphia and Boston is 6 per cent.
Therefore the business men OF the West
are not entitled TO credit because they can
not pay the rate OF interest demanded and
meet their obligations at maturity. This
might be reasonable deduction il ii were
not so unreasonable. It might be true ii
Il were not false. The value OF money, or
IN other words, the rate of interest, de-
ponds like the value of other commodities
upon thelaw OF supply and demand. Money
commands higher rate OF interest in the
state OF Washington because there is an
active demand for il. There is an active
demand for IL because the opportunities for
using il to advantage are unsurpassed.
Borrowers can afford to pay the high rate
Of interest on account of the superior nat
ural advantages that they enjoy. The
lumberman, for example, can manufacture
lumber and compete in the markets of the
world and at the same time pay double the
wages that his competitors pay and double
the rate of interest; and the farmer can do
likewise under like conditions and for SIM
liar reasons with his hops and his grain
1t is an axiom in political economy that
the cost of production OF the fruits of the
earth increases, other things Being equal,
with every increase in the demand, and it
Is fundamental law OF production from
the soil that increased labor in any given
state of agricultural skill is attended with
less than proportionate increase of pro-
duetion. In other words, as the develop
nlent OF the soil, the manufacture Of lum-
Der and the working of mines already
opened progresses an additional outlay of
money and labor viii not yield proper
tionately greater returns. The natural
advantages of q new and comparatively
undeveloped state win with the lapse of
time and the infiax of capital and labor
tend more and more to an equality with
the older communities, and with this
tendency will come diminution in the
rewards OF the two elements of production,
capital and labor. That Is TO say, the rate
OF interest and the wages oil labor will fall.
At the present time. however, Ii II not re-
markahle but in entire accordance with
natural and economic laws that the rates
of interest and the wages OF labor should
be comparatively high.
To an Eastern investor who desires q
higher rate OF interest than he can com
mand in securities of local nature the
West offers an attractive field for invest
ment. And il may be added that il such
investments are made through responsible
agents they are as a rule absolutely secure.
Nothing bat careiessness or criminal in
tent on the part of the companies making
the loans can render them unsafe There
is no reason whatever why there should
ever be a loss hy reason OF an investment
in Western mortgages. nor would there be
if they were always made through repusa-
bic companies doing q conservative busi-
ness.
To pass from the subject Of Western
mortgages In general TO those of the State
OF Washington In particular, ii may be OF
interest 10 state few facts regarding the
farming lands of the state that may serve
20 give an approximate idea Of the extraor-
binary fertility OF its soil.
In Western Washington the princinal
crops raised are hops, hay, oats. potatoes
end fruit Average hop land VIII produce
1000 pounds OF excellent hops 10
the acre. The cost OF hops in the hals is
about cents per pound. n Is safe TO say
that II cents is low average price for hops
and IS would probably he nearer the mark
take one year with another Even at the
lower estimate, however. land devoted 70
hop culture will yield an annual return Of
SO per acre. And yet for ioanang purposes
land OF this description il rarely valued at
over SOC per acre and often nc only 500
Ordinary farming land will raise three tons
of hay 20 the acre, and from three 70 fuur
hundred bushels Of potatoes. With hay at,
So per tos and potatoes ~ 90 cents per
hushel. tire current prices at the present
time, the profits per acre can be easily CON-
puted. Fruit land Of average quality will
yiesd an annual profit of from So 10 500,
while the wheat lands 81 Eastern Washing.
ton yield average crops Of forty bushels to
the acre When il Is considered that these
crops are all raised without any artificial
addition 70 the coil. and that such
thing NJ q failure Of crops by reason OF
droughts or natural disturbances al any
kind Ii unknown she enviahle lot Of the Az
erage Warrington farmer can be readily
appreciated. As one farmer expressed IL:
II can make more money and i've more
comfortably with i've acres OF cleared land
In Western Washington than with is0
sores in Dakota.
Conservative investors frona the East
who have visited Washington Tor the Ell
press purpose oa investigating is resources
have agreed that no state III the Union
sarpasses i in natural advantages and
future prospects. They have found that
there has been 10 undue saaatnn in the
prices Of real estate devoted TO farming
purposes. and shst tbs fertility OF The soil.
tbs ehsra 81 climate. and sae exseut and