Morris tribune. [volume] (Morris, Minn.) 1880-2000, 1910-06-24
WESTERN MORTGAGES.
A Leading Eastern Financial
Journal Reviews Situation.

Farm mortgaging in many parts OF
the west is receiving careful consid-
GRAFTON in financial circles. There has
been during the past decade an almost
uninterrupted expansion, accompani-
ed later by a good deal of specula-
ton incident to the advance in the
prices of lands, as well as the prices
of products. A basis for this expan-
sion is seen in the fact that between
1900 and 1909 the average farm value
per acre of wheat increased from
81 81 to 1852, or more than doubled.
That of corn rose from $9.02 in the
earlier to $500 in the latter year.
Oats increased from $7.63 to 1929;
barley from $8.32 to $3.50, and pota-
toes from $34.78 to $3.50 an acre.
The Commercial West'' of Mime
apolis, raises the question whether
farm loans are not absorbing too much
money for the good of farming and
finance alike. Speaking of the recent
past, it says:
foreclosures during the last half
dozen years have amounted to an In
finitesimal percentage; therefore in
vestors are satisfied. Yet the same
factors that have caused this conf
dence, namely good crops, high prices
and advancing land values, have also
caused great activity in the farm land
market, resulting in innumerable
transfers and the placing of mortgages
on old farms in order to buy new
lands and on new lands by farmers of
limited means-and by spectators.
A feature of the situation that is be-
ginning to be considered by careful
financiers, however, is not one of land
values, crops or earning power of the
land, but that of the personal equa-
tion relative to over-speculation in
lands and to the possibility of too
great expansion on the part of many
farmers desire to own over-much
land. Furthermore, as general
financial proposition, some are asking,
Is not the credit extended to farm
lands already as great as is warranted?
Evidently the Merchants Loan &
Trust Co. of Chicago, which has done
large business in farm mortgages in
three or more different States in
marking up the rate of interest on
farm loans to per cent believes the
time has arrived when a further
advance would lead to a dispropor-
tionate extension of credit. Speaking
on this matter, the banks representa-
tive recently said:
"We were being swamped with de-
mands from the country for funds.
There may have been excessive spec
ulation in land in some sections of the
west, especially in new areas and irri-
gated lands, but our own experience
has been that the farmers who bor-
rowed money put it back into their
own land in one form or another.
They bought new machinery, live
stock, dairy and poultry facilities
and so on, thus increasing the pro-
ductivity of middle western FARMS"
There are two main tendencies in
western farm mortgaging, one of
which is the capitalizing of facilities
for farming on more thorough busi-
ness principles, and the other the far
more primitive one of taking up newer
lands by mortgage wherein the haz-
ards of crop risks and changing val
ues of property have yet to be deter
mined by experience. The danger
comes from the latter rather than
from the former kind.
Probably the maximum of solvency
in western farm lands was reached
about 1901 or 1902, when the heavy
of 1898 "a had been largely
cleared away. From the later period
down to the present old lands and
new became the subject of another
era of mortgaging, the scope of which
has been rapidly extended until eau
tionary signals are justified. Money
stringency in the country districts has
begun to reduce country balances in
the monetary centers. 1t would be
unfortunate if rural financial resources
were to be so completely tied up with
land speculation as to handicap the
actual planting, working and harvest
ing of the crops for want of working
Street Journal.