The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1891-03-24
GOVERNMENT LOANS WITHOUT
INCREASED TAXATION.
PLAINFIELD, n. j.,
March 9. 1891

Savings Bank system for the United
States, but the attempt to establish
such a system here has failed for the
reason that there is no place for the
permanent re-lOaning of the deposited
money. The government cannot enter
into a system Of banking that will con
stantly receive money upon which 1t
must pay interest, and with no large
market where the money that it has
taken in can be again loaned, for long
terms, and at a slightly increased rate
of interest.
The nearest approach to the estab-
lishment of such a system was under
the Cleveland administration, when
the charity organizations Of New York,
and the associated charities of the
other large cities joined in a petition
to Congress for this purpose.
In House Bill No. 413, 18th Congress
Cirst SESSION. Mr.. Lacey, from the
committee on the postoffice, etc, set
forth how the postal savings banks in
foreign countries loaned their deposited
monies, /. e., to churches towns, and
corporations. In Great Britain to the
Red Sea and India Telegraph, church
temporalities, public works, loan COM
missioners. In Austria the postal
savings banks loans on mortgages, Sc
curities and bonds of Austria.
British postofices savings system
(sectiOn g. can invest in all the securi-
ties in which funds of savings banks
established under existing laws may
be invested"
The loans of a postal savings bank
are preferably long term loans; what
might be called perpetual. The inter
est alone being payable when the
security is sufficient.
With a rate of interest to the de
pOsitOr of p per cent. and a rate Of 3
per cent. to the borrower there would
be no actual expense to the govern
ment.
The government would not be ex-
pccted to enter into a negotiation with
every individual. so that the Organiza-
ton of some sort of an intermediate
association would facilitate the opera
tiOn of lOaning upon farm mortgages
The formation of associations which
would borrow the money from the
| government, and as an organization
be responsible for the loan, in turn
lOaning to the individuals of the asso-
citation, would remove the necessity
for the government being burdened
with details, or bearing the risk that
always comes from mis-directiOn when
| large numbers are involved.
Instead of associations formed for
the purpose, the States could borrow
the money and loan it to it's citizens.
Under such a system the farmer
could get perpetual loan at very
! low rate of interest, secured upon his
farm AS the system grew and became
perfected, the rate of interest would
! decrease, the same as the rate of post
age decreases as the system grows and
the service is perfected.
There could be no burden upon the
| tax payers, 50 that there would be no
cause for grumbling from that class.
Under such a system the working
man could have a home, and the
farmer a farm; this lcOuld cement these
into one strong alliance
The failure by Congress to pass the
bill for a Postal Savings Bank system
led the charity organizations of New
York, to start a penny savings fund.
Secretary Kellogg, of the charity or
carnations of New York, in speaking
of the penny savings fund, said The
only trouble with the saving fund is, it
works too we'll we get more money
than we know what to do with The
problem encountered with the penny
saving fund is, what to do with the de
posted sums
Legislation for such a purpose would
not be for a class; the sons of wealthy
citizens could provide themselves with
a home or a farm.
There are numerous preCedentS for
such government loans. The Home
stead act of 1862" the Homestead .
laws of the Argentine Republic; the
"Ashburne Act" A measure now be
fore the British Parliament which con
templates the loaning, by the govern
ment, oft ten million pounds to tenant
farmers in Ireland, for the purchase of
lands. The bill before the Massachu-
setts Legislature, introduced by Hon.
Robert Treat Paine, Jr., in 1888, en-
titled IAN Act to promote the Estab-
lishment of Benevolent Building Asso-
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