Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1912-06-07
Government Will Help

Washington, May 2S.---Cheaper
money for the borrowing American
farmer IS the object of an investiga
ton recently undertaken by the state
department through five of its am
bassadors in Europe,
In America the farmer today pays
higher rate of interest for his
money, proportionate to the security
which he offers in his farmland
mortgage. than almost any other
class of investors in the country. In
Europe the farmer borrows on equal
terms with the biggest railroad, in
dustrial corporation, or municipality.
President Taft wants to introduce
the European system in this country
SO that the American farm err can raise
money on his farm through a bond
salable in any part of the country.
Cheap money, thinks Mr.. Taft, will
put it in the power of the small farm
err, or the tenant who wants to start
out for himself, to get his farm on a
paying basis without shouldering
staggering burden at the outset. 1t
would thus do more than all else to
advance the "back-to-the-farm" idea.
1t would enable the farmer to adopt
the scientific methods of farming
which the government is teaching him
and which always costs money at the
start.
The investigation is considered one
of the most important undertakings
yet attem pted in Dollar Diplomacy
Myron T. Herrick, the newly appoint
ed ambassador to France, is Secre-
tary KnoX's right-hand man in the
investigation. Mr.. Herrick is himself
the product of an Ohio farm and has
made the problem of the farmer"
hobby for years. When the work
in Europe is completed the state de-
partment will prepare an organiza-
ton plan to fit the scheme to Amer
lean conditions and a legislative pro-
gram will probably be mapped out for
the president to submit to congress.
The investigation is conferred about
the Credit Foncier of France and the
Landschaften of Germany.
The Credit Foncier is a limited
liability company operated under the
supervision of the French government
for the purpose of lending money to
public-service corporations, communi-
ties, counties and landowners, and to
create and negotiate bonds based on
mortgages which are limited to the
amount due from the lender. In other
words, the Credit Foncier acts as an
agent for the French farmer, so that
instead of seeking to raise money
directly from some local investor by
mortgaging his farm the farmer
places his mortgage with the Credit
Foncier, which in turn issues a bond
based upon that mortgage and which
can be sold anywhere throughout the
country. In this way the French
farmer is freed from the necessity of
borrowing in the limited market of
his own immediate vicinity.
1t is just this restriction which is
forcing the American farmer to pay
exorbitant rates of interest and to put
up with none too acceptable terms
Tn thic oOun4ry +ba For,,o. 10 ,ouoo4,a
ally forced to borrow from some in
weston in his own community. If
local conditions make money tight"
there he suffers accordingly. In one
section of the country he pays c
per cent interest and in another 1C
per cent, though in both instances the
security offered may be the same
Never can he compete with the bond,
of the big industrial corporations
though in many instances the secur
ity which he offers is just as good a
that of the corporation.
Two classes of loans are offered
the French farmer by the Credi
FOncler: Short-tlme loans, running
from one to nine years; and long
time loans, running from 10 to 7
years. The rate of interest which tn
French farmer pays is only 4.9 pc
cent per annum. Loans are made OF
first-mortgage security only and tn
loan is limited to one-half the tota
valuation of the property upon whicl
it is made. On the short-time loan
the borrower pays only the interes
1ue at the end of each year and a
the expiration of the loan pays bacl
the principal. In the case of long
time loans, however. he is given bet
Ter terms. The principal in such loan
5 paid back in annuities, which ar,
aid together with the interest du
1t the end of each year. The annu