The morning call., 1890-05-03
MORTGAGED FARMS.
General Butler Forecasts a Financial
Cyclone in the West.

Boston. May General Benjamin F.
Butler, at the annual banquet of the Butler
Club tonight, made startling attack upon
Western farm mortgages while discussing
the question of causes of depression and
discomfort. After showing that at the pres
ent rate OF compensation the farmer cannot
hold his own with the skilled mechanic,
thus causing farms continually to depre-
ciate and making their owners slowly but
| surely evolving into tenant farmers, he
said: "But does the farmer lose his lands !?
Taking simply the agricultural lands. the
farms of the Western States, exclusive of
city, county and town property, there will
be found to be invested in farms the stupen-
dous sum Of S3, 450, 100000, and this at a
rate of interest averaging Z to 8 per cent,
to say nothing of the costs and commissions
of agents which have been taken from
farmers for procuring the loans of money,
which may be safely said to be not less, on
an average, than per cent. The human
mind at once does not taken in the results
of these vast sums. To give an Illustration {:
The whole national debt of this country
in 1865, at the close of the war, was
S2,600,000,000. very nearly one-quarter
less than this mortgage debt. But
| there is another fact to be taken
iHlO 1AIS COuulll las
been twenty-five years, with all its immense
resources, engaged in paying sometimes
anticipating its payment the national debt,
and has reduced it only 81 GOO, ,000, 600. or 81
per cent. And the national debt has had a
much lower rate OF interest, and may be re-
funded any day at 3 per cent. There is no
way of refunding or reducing this fabulous
mortgage debt, with its oppressive and
destructive rates of interest. To redeem il,
il done within the same time that the
national debt has been Cancelled, so far as
1t has been Cancelled, would require the pay
ment of considerably more than double the
amount of the national debt at the end of
the war. so that the payment of these mort
cages is simply impossible. The payment
OF interest upon them is also impossible, be-
cause we have seen they call for from to 8
per cent, and all statistics show that the
average profits on farming industries are
between 4 and 5 per cent only. hardly over
T. these mortgages never Will be paid for
these reasons, if the debtors were ever SO
mucn disposed TO pay them. But ttey Will
not be disposed to pay them, for. by reason
OF the deductions of the commissions and
| costs, at the rate of per cent, there was
| lett burden upon the mortgagors of over
S24l 100000 of debt, for which they have
never received any value, which therefore
diminishes SO much their ability to pay, and
| which they look upon as having been q
| cheat upon them.
How does this affect the investors? No
honest man can invest money iu these
mortgages. Capitalists have long since
ceased to invest in them, but there has
been class of thoughtless brokers who
have been engaged in gathering from per-
sons Ignorant of these facts. under the
temptation of high rates of interest, their
little moneys which they have laid aside
for rainy day, and they have apparently
vested portion of such money in farm
mortgages. Our State savings banks have
escaped this gulf, but trust companies have
recently been Incorporated by our Legisla-
ture to receive money on trust, which they
are permitted to invest in mortgages out of
the State. One of them has already gone
| up-a very disastrous failure. These trust
| companies which have made such invest
ments will simply go up with the mortgages
In which they have invested. l trust the
broad seal of the commonwealth will not
be permitted by the Legislature to be used
as al instrument to defraud the unWary
but hard-worklng people oil the State with
such investments.
"They do not refer to the farm mortgages
in the Eastern States. Certainly not, be-
cause there are scarcely now any mortgages
put on farm lands IN the East. Nobody
VIII take them, and we have to import
Swedes to cultivate our farm lands which
are not mortgaged.
"They have cyclones out West, accompa-
MED with thunder. lightning, heavy rains
and hail, which are very destructive. Look
out for financial cyclone, where no build
Ing OF institution VIII be strong and tight
enough to protect the business OF this cOun-
try from the destruction which will follow
in its path True we have the Silver Bill
now on the tapis in Congress, which is to
be q panacea of all our financial difficulties
"a panacea certainly, in the views of some
Western men; but 1t would take all the
silver that the mints of the United States
can coin at the rate of four and a half mill
ions month, and all the silver that the sill
yer mines can produce in that time to pay
one years interest on these mortgages, sup
posing that no more money is borrowed"