Omaha daily bee., 1910-03-06
NEBRASKA FARM MORTGAGES
Matter Worries an Investigator from
New York.
CONCLUSION NOT WELL FOUNDED
Superficial Examination by an East
ern Writer Dem O~nstrnted TO he
Foolish by Facts as They
Really Exist.

Foolish by Facts as They
Really Exist.
An eastern correspondent of the New
York Times. in a recent issue OF that
paper. has taken occasion. from informa-
ton which he is presumed to have gath
cred while on a trip into the western
country to expose what he regards as an
alarming condition Of western farm mort
gage indebtedness. Nebraska has been Sc
lected by him as an example Illustrative
Of the reckless disposition among the west
Crn people to buy and mortgage farm
lands. The basis OF this alarming situation
which he assumes to have discovered is
upon the following hypothesis. lie says:
There is adequate authority for the state.
ment that there are probably more western
farms mortgaged now. and for greater
sums, than there were in the early '90s,
when times were bad and everybody was
feeling sorry for bleeding Kansas" We
will add our probability to the above and
say that there are many times more farms
In the early sos and that these farms are
worth from three or four to many times
more money than they were in the early
'9Os.
He further states:
The situation in Nebraska is typical OF
the whole western country. In 1907 there
were filed in Nebraska 1868 farm mort
cages, representing a total indebtedness
upon the part Of tho farmers involved OF
S36. 49, 900. During the year II, $50 mortgages
OF f26, 357, 900 were paid. During the follow
ing year l6,lOS more mortgages, represent
ing an Indebtedness of $S4, 4Os, 900. were filed.
while 1904 mortgages, representing only
$50, V1,OO, were paid. Thus in those two
years the mortgaged Indebtedness of Ne
bTaska farmers was increa sed 3d. 6, OOO.
Fifteen years ago these facts would have
created CONSERVATION throughout the whole
country. They ought to create consterna-
ton now among all Of those who may be
considering the advisability of going west
to buy either government and or land that
etc.
What does this two-year increase of S1S,
TS,ON of credit or security mortgage mean
to the producing ability Of Nebraska today
Practically nothing. What would it mean
in actual money loan mortgages under
present conditions? Nothing.
A Prophet without knowledge.
1t is fortunate for the buyer and seller of
western farm lands, for the public senti-
ment that is backing the improvement and
encouraging the development of western
agricultural resources, that they are not
under the persuasive influence OF this
great eastern prophet. 1t is an old saying
and accepted with more or less credence,
that a prophet is not without honor save
in his own country" In this case we have
an eastern prophet without knowledge of
the western country.
Some Of the reasons WHY western farm
mortgages exist and what they represent
against the land, from a debt point of
view, will be better understood when we
explain the basis of transaction creating
the great majority Of these mortgages.
Owing to the scarcity Of farm labor and
the difficulty of operating farms under
these embarrassing conditions, many farm
ers who have no boys, no help within the
family, and who nave acquired money
ahead are selling or renting their farms
and retiring from active farm work.
The renting of the farm is quite often
unsatisfactory to the landowner. The ten
ant, as a cash renter, wants to get every
thing possible out of the land and is not
interested in putting anything back. This
kind Of experience encourages the farm
owner to change his method a little. and
this he quite often does, in the sale of the
farm to an ambitious homeseeker who can
pay a few thousand dollars down, enough
to guarantee the sincerity of the purchase,
the balance he can have on long time al
5 per cent, the seller being satisfied with
the annual interest. The security in pres
ent prices of land, is so we'll established in
the mind Of the western farmer, that he
feels better with the mortgage in his safe
than the money in the bank. With the
former he is free from any annoyance in
getting his money loaned out again on
some other mans farm.
Effect of the TransactiOn.
In this transaction there is secured a
good tenant, a man interested In keeping
up the fertility Of the soil, repairing fences
buildings and looking after the gen.
eral welfare of the farm. This transac.
ton on a 1e0-acre farm will probably rep.
resent 5000 or 1900 paid in cash and q
mortgage filed for S12, 900 or S13, 900. These
are not isolated cases, but represent
thousands of mortgages that are belns
filed each year, all over the agriculture.
states of the west. It does not represeni
a desire to get rid of the and at f~ictitiou:
prices, but merely a shifting OF RESPONSE
bility in the care and management of tht
land, owing to the great problem of hirec
labor that is confronting the American
farmer with greater urgency for solution
each year.
Another source OF mortgage indebted
ness and which need not create any undue
alarm or apprehension Of extravaganza OIL
dangerous speculation, is the growth o.
home demand for farms to supply tn,
boys, as they are coming of age. Thous
ands of boys all over the rich farming
districts of the west are each year beinl
provided with farms by the assistance o.
the old homestead. A farm in the neigh
borhood is bought for the boy, possibly a
a strong price. This is added to the re
sources of the home farm. and the com
blned efforts OF the family are exerted L
pay for 1t, and they are paying for thes,
farms. to which statement every loca
bank and loan company can attest.
Nebraska farmers are quite generally
becoming money l~oaners, and represent {
very large share In the ownership OF tn,
mortgages filed on farm lands in the state
Banks in every county in the state holt
farmers money to be applied on the pur
chase of farm mortgages, and country
banks generally accredit 80 to 95 per cen
OF their deposits as farmers money. Wher
the western farmer cannot put his money
out on farm land security, he then resorts
to buying land, another way of gettin,
his money invested in what he believes [,
be the best and safest security.
Fixing of Farm Values.