The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1911-08-04
A Word for the Loan Companies.

The Tribune is in receipt of the
following communication on the mat.
ter of farm and orchard loans from
the standpoint of the loan com.
panies:
From the pungent remarks an.
pearing in the last issue of the Gem
state Rural under the caption care
the Loan Companies Knockers?" il
would appear that the editor was
not totally devoid of interest.
However the genial editor of the
Gem State Rural is not the only
Idaho booster to awake from the
pleasant slumber into which he had
been lured by the Sirens tale of
future values, only to find that stern
capital refuse to accept these values
as an adequate basis upon which to
make loans. The chief complaint
made in the article is that the loan
companies refuse to make loans UP.
on orchard valuations and insist up-
on loaning on farm land values
only, all of which the writer de-
clares is absurd and contrary to all
rules of business and common sense.
AS a matter of fact no one has
ever seen loan companies tumbling
over each other to make loans in
Idaho. After much persuasion a
few of them have reluctantly con-
sented to invest a limited amount Of
capital in Idaho mortgages more as
matter of experiment than any,
thing else. Idaho is in a very pri-
mary stage. Most of her large irri-
cation projects are only in process
Of construction and a few of them
are in the hands of receivers. 1t is
therefore only to be expected that
the loan companies would proceed
with extreme caution. The fruit in
dustry also is an unknown quantity.
Few of the orchards are developed
those that are full bearing orchards
have not been so for a long enough
time to fully determine, what they
can do. The loan company is not
master but a servant. They do
not loan their own money but that
of their client, the investor. When
they take loan they do so with the
expectation of selling that loan as
soon as possible and they only make
such loans as they can dispose of
without trouble or delay. Farm
loans are made on much the same
valuations all over the country.
This is so because experience has
taught the investor about how much
money can be loaned on an acre of
land with safety. Idaho loans carry
slightly increased values over loans
made in the middle west for it has
been demonstrated her land is able
to produce more per acre than it
can there. However this is not so
in regard to orchards for the reason
that fruit raising is far more hazard
Gus than other crops. There are
more outside conditions that have to
be considered in making such loans
and hence they are less desirable.
Loan companies like other institu-
lions prefer to follow the lines of
least resistance, hence they do not
care to educate their clients into
buying a class of securities with
which they are not familiar. Fruit
raising is a speciality in itself and
requires men who are trained in that
line to make a success Of 1t. Other
wise they may ruin an orchard thru
ignorance, and 1t would require
years to put 1t back to its former
value. Frosts, insects and blights
may destroy the crop and result in
default of interest payments, In
fact so many unnecessary chances
have to be taken that the loan com
panies prefer to loan on lands pro-
ducing staple crops of ascertained
value. That they have this right
surely cannot be questioned, and to
attack them for carrying out this
right comes with poor grace from
the editor of a paper whose chief
claim for recognition is its desire to
build up the country. Especially
considering the fact that these In
stitutions are furnishing capital for
that very purpose.
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