The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1896-11-30

at first. They got a commission on
what loans they negotiated The for
nation of debenture bond company
marked the growth Of an agents bust
ness in making loans lie found q cor
pOratiOn an easier and more convenient
method Of doing business, as wen as
more profitable one. Then at first it
was felt that people in the east would
have more confidence in company
than an individual.
With an agent established in a certain
section, his first business was to seek
loans. He did not wait for the borrow
erS to come to him; he sought them
out. Money was plenty. it only desired
investment at the prevailing high rates
OF interest The agents profit came in
his commission at first.
As the time went on all the money that
was needed in particular locality had
been loaned on fair property. Then the
agents business would naturally end
and he might as well retire That was
not an assuring prospect to men who
found loaning other peoples money at
good pay a most easy and convenient
developed property to make loans on,
and that is where the first instances of
dishonesty came in.
Until the bubble burst many a land
owner PAID on a first mortgage and the
eelsLIlseo interest with new loan " hieh
more enlerprlslng agent Was willing
to make, without regard to the interests
oh 1ne investors. The farmers, that is
the genuine tlllerS OF the soil, were not
to blame. They felt the need of money
70 Duy implements and pay bills when
crops were bad
The next step was from the host of
pre-emptors. These were farm labOrers
or new settlers, who finding money so
plentiful. desired to take UP government
sections and hold them for six months
rather than work hard The only ain,
of the agents was to loan. therefore they
did not question whether these men
were to til the soil or not; thev only
wanted a satisfactory title, and the
money was forthcoming thousands Of
handed over to these men to walk away
with as soon as they could conveniently
So it went and thousands of dollars
IoIloWed hundreds into the region OF
nigh interest and borrowing farmers.
nov. II happened, When these pre-
emptOrs and OVerburdened farmers de-
scnemlnS agents was threatened. If in
terest was not sent east, they were
easily able to understand that money
LOT lOstus Woulu not come West 30 a
brilliant idea was carried out. 1t was to
advance the interest 50 long as more
money could be induced to come into the
region. 1t looked well. Investors in
the east, whether officials in banks or
individuals. did not notice that the Dor
rOwers had defaulted on the stated pay
ment for the use Of the money.
When poor farmer. overburdened
with a financial load, turned and fatty
said he could not pay the amount due.
the agent smilingly got all he could and
made up the remainder from another
batch of funds which came in, in view
of arrangements made for new increased
with the cash he had raised on a mOrt-
gage the agent or company did not i'm
mediately hurry to a telegraph office
and announce the fact to the investing
bank. No. he simply said nothing but
arranged to increase the loan on the
place. and then from the new funds,
proceed to pay the interest
The same was true on fake schemes on
town lots. The schemes We're numerous.
They were only estimated by the plausi-
bility with which the originators were
able to surround them. and the money
kept coming in faster and faster. Then
suspicious were aroused. and money did
not hOW rapidly into til hands
opened so wide to receive it.
With the decrease in amounts came
the exposure of the schemes as the
agents and representatives found them
selves unable to pay all the defaulted in-
terest without the necessary funds COM
ing in
Then the plans failed and the fore
closure of MORTGAGES on worthless lands
did not bring any returns
Soon confidence was lost The banks
tried to recoup their enormous losses;
they tried for months. Interest was re-
duced. and then the depOsitOrs lost con-
ndence.
Soon a run commenced: then the courts
We're called in for injunction. That is
why most of the New Hampshire saw
ings banks have gone to the Wall-sur-
plus, general funds and interest over
per cent, we'll as large portions OF
the deposits eaten up by the land sharks
OF the west