The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1897-06-08
Entitled to Thanks.

Inc plan OF John IL. DOS fdSsos, ol
New York, for the creation of a vast
mortgage loan company under a chart
er from congress, for the purpose of
carrying cheap banking facilities to
the disaffected farmers of the south
and west, has as yet gone no further
than the academic stage. 1t has evoked
a lively discussion among political
economists and brought down upon
itself a considerable volume of criti-
cism most of which Mr.. Dos Passos
pronounces unfair; but there appears
to be no frantic ea'gerness on the part
of financiers or congressman to seek
identification with the project.
This is the more curious after we
learn from the Springfield Republican
that the system of loaning upon land
by means of companies issuing trans
ferable securities is in vogue in one
form or another in nearly every coun-
try of Europe. The Credit Foncier of
France, with its assets of more than
S,000,0 900 francs, is one of the most
conspicuous examples. The national
bank of Austria-Hungary has a mort
gage loan department which had out
standing at the close of 1896, S4,257
bonds, representing a face value of
1873, ,4S3, 400 florins $3.50, ,OO0, ,0OO). The bank
of Russia has recently established a
mortgage loan department and makes
advances also to the farmers upon their
growing crops. The process of man
agement of these corporations is usual
ly to grant a loan amounting to not
more than so per cent. of the ascer-
tained value of the property. The loan
is represented by mortgage bonds, sus-
tained by the general credit of the
company, which are placed upon the
market like other negotiable securities
The loan in cash to the owner of the
land is sometimes paid directly by the
bank or credit corporation and is some
times obtained by the sale of the bonds
issued to him. The Austrian plan was
originally to leave it to the borrower
to float the bonds, but the national
bank now assumes this function for a
small commission and the bonds are
regularly quoted on the stock ex-
changes. The farmer or land owner is
thus able to obtain credit for a longer
or shorter term as easily as the owner
of more movable property. Hundreds
of millions of dollars in these bonds
are afloat on the Austrian, German
and Paris markets and have contribut-
ed greatly to benefit the rural COM
munity.
1t was Herbert Spencer, If we re-
member correctly, who once declared
that every reform had to pass through
three stages; first, indifference; next,
violent opposition; and then, accept
ance. The proposition of Mr. Dos Pas
SOS has not yet emerged from the
first of these stages, but we suspect
that it soon will. Whether it will also
survive violent opposition is another
question; but we are inclined to be-
lieve that there is enough of merit in
| the suggestion to insure for 1t, in some
| form, an eventual trial. At all events,
the originator of it is entitled to thanks
for his ingenuity, his true conception
of the reason why Populism and similar
manias are so contagious in the west
ern and southern states. and for his
bravery in daring to propose a serious
attempt to remove these dangerous de-
lusions from the political equations OF
the future.