The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1897-05-21
An lridescent Dream.

udl certainty is all interesting DiO-
position which John r. Dos Passos of
New York advances for the pacficl-
tion Of the agricultural sections. He
desires congress to issue a charter for
vast loan and mortgage company,
with capital stock of $100,000,000 to
be subscribed by the people in sums of
$40 and upward, no person TO be per-
mitted to hold more than $1,000 worth,
The money thus subscribed, it is ex-
planned. will be used in making loans.
1t will be invested as a guarantee fund
--$25, ,0000 900 in government bonds and
the bulk of the remainder in other ap-
proved securities. Then the company
will scatter it's branches in every
state and county, and its agents in
every town. 1t will offer to lend on
mortgage up to so per cent of the ap-
praised value of Alarm, for 10 to rs
years time, charging interest of not
over per cent and, as now contem~
plated not over 465 per cent, and pre-.
viding q plan of slight payments on
the principal with each interest pay
ment, so that the debt will be sunk
within the time the mortgage runs as
with our cooperative bank loans; but
the borrower will be privileged to pay
off his debt as quickly as he pleases,
or buy up the cupons to be attached
to his mortgage held by the company.
Warehouses will be established by the
company and farmers can pledge their
more imperishable crops for loans.
1t is claimed by Mr.. Dos Passos that
such a company could readily circulate
it's bonds in place of money, thus Vir-
tually increasing the circulating med
ium. It's profit would come chiefly in
the difference between the interest
paid by borrowers, which he avera ges
at 465 per cent, and the average IN
terest borne by the bonds, estimated at
3.G5 per cent. OF course there would be
profit also in the foreclosure of mort
cages, but it is calculated by Mr.. Dos
Passos that this item would be smaller
under such system than under any
present banking plan.
The Springfield Republican exposes
the fatal flaw in this otherwise invit-
invest in any private or public cor
poration, or in government itself, the
power to issue circulating notes or
bonds based on land or its mortgages,
| is to invite all of the dangers and de-
| moralization and ruin which flow in
evitably from unlimited issues of ire
| Geemable paper. We may" it adds,
assume that all the agents of this
mighty financial body are competent
| and honest, and that all their apprais-
| ais of real estate for loans are conser-
Vative and that all loans are confined
to so per cent of the appraised value.
Yet what may follow? This value is
the money OF price of the property, and
| price, other things being equal, de-
| pends on money volume. That power
| therefore, which controls the money
volume controls prices or values in
money, and this power would be held
by the corporation in question. It
| cccOrdingly issues it's circulating bonds
| On large amounts Of land, and the ef-
| feet is to expand enormously the cur
| rency volume. Prices rise. The morey
| values of these properties rise. Fifty
per cent of that value is one sum to-
cay; tomorrow it would be a larger
sum, and the increased loan could ac.
cordingly be called for and made witt
the result of further currency expnn'
sion, and further issues, and so ON In
definitely. Is there any doubt of wha
the end would be?"
Certainly not. 1t We're better e
| chance free silver at once than to opey
the door to such unlimited initiation
The United States must keep it's leSa
tender fiat off all assignat paper su2i
is is here proposed. If the Dos Passo
loan and mortgage company can eli
culate it's bonds on their own unaide,
value, well and good. Then each ma.
who should take one and get wors tet
by it would have only himself to blam
Admirable as may be the designer
aim, his project is quite as impractica
as was that of the man who thought L
lift himself up by tugging away at hi
own bootstraps.