Middlebury register. (Middlebury, Vt.) 1886-1937, 1891-03-13
TIE WESTERN FARM MORTGAGE
SITUATION.
GOOD AND BAD sEoURlTlEs-soMEW WHOLE.
SOME ADVICE.
TOPEKA, Kan, March, 2, 1891.

ceedingl" interesting and the distur-
bancc in that class of our securities has
recently assumed serious nature There
have been forwarded to me during the
past ten days clippings from various
local Vermont papers touching on the
mortgage situation in Kansas and Ne
braska and prevailing them all dis
tinctly note misapprehension as to the
exact condition of the business and
very preiudced view taken of the sub
ject. Everything is contemplated from
the standpoint of the lender With your
kind allowance | will endeavor to present
briefly both sides of the matter AS find
it in survey of the field from the CAPT
tai of Kansas.
Unquestionably there never has been a
security placed before the people of Yer
mont which has met with such popular
favor among all classes as western mort
cages, particular farm mortgages. As
means of relief from the prevailing low
rates of interest and the difficulty of OBJ
tanning investments at once safe and
remunerative, they were eagerly pur
chased, The stability of land as a secu-
rity that was secure was greatly dilated
upon and without exercising any discri-
mination whatever as to the character of
the parties with whom they were deal
ing, the locality in which the company
was operating, or without recognizing
that the greater the per cent the greater
the risk, they accepted anything negotia-
ted in the shape of a first mortgage on Il
western farm. There were really few
who would have not taken more readily
the eight and ten per cent securities of the
Farmers Loan and Trust Co. of Anthony,
Kansas, the Dakota Loan and Trust Co.
of WateItown, Dakota, than the five and
six per cent loans of the conservative
Iowa Loan and Trust Co. of Des Moines,
Ia. the Missouri Trust Co. of Sedalia,
Mo-, or the Kansas Loar and Trust Co.
of Topeka, Kan Hungry and thirsty
for high rates of interest, they tempted
the corporations placing their invest
ments to take greater risks, to push out
into untred fields, into sections suscep-
tible of drouth, because in the older, safer
and more settled districts competition
had reduced the rates and in order to
make anything like profit and meet this
demand removal to "greener pastures
was necessary. The temptation was too
great. Many of the companies yielded
and the result to both the lender and his
agent is obvious.
Accustomed, as New England people
are. to look toward the great West as
that portion of our country destined to
become the bonanza of the future, it is
not surprising that Kansas, Nebraska,
Dakota and the States tributary to them
should have seemed an attractive field
for investment from which large profits
should be realized. Money lenders were
overloaded with idle money. Financial
institutions and trustees had put their
funds to an excessive degree into govern
nent, state and municipal bonds. Rates
were as low as five and one-half, five and
even four per cent. Hence the eXtraor-
binary demand.
SOME MISTAKES OF THE LOAN COMPA-
As already limited above, many of the
investment companies have committed
some very serious errors in the loan
ing of this money and in very
IF no is oil
censurable. Deceived by brief exper-
fence, biased by local patriotism and in
terested in enhancing the value of their
own belongings. the hopes of the future
became the fictitious effigy of the present
and abandoning what among men of
more rational ideas would have been
termed conservatism, they overstepped
theItbounds of goodl Judgment. Many
who embarked in the business were young
men of that hopeful, sanguine, visionary
temperament encountered so frequently
in newly settled districts. Some of them
were men who had accumulated wealth
during those insane eras of speculation
which swept over Kansas City, lndianap-
oils, Omaha and Minneapolis, men who
were utterly unacqualnted with land
valuations and who made no allowance
for depreciation incident to the failure of
crops, insect ravages, etc. Some of these
agents were employed on commission
basis, very unwise method, and one
which human weakness is always sure
to improve. On this plan the agents
motive could scarcely be other than "A
selfish one, for the greater the loan the
greater was his commission. And so the
golden stream poured westward, compe-
tition arose among the vast number of
loan companies in the field, insurance COM
panes stepped in, in the older and more
settled portions of the States. Rates
were reduced to and 6 per cent and
reckless lending was the result. The
far western portions of the States were