Catoctin clarion., 1912-10-17

The state departments investiga-
tion OF European systems of co-opera'
tive credit has now reached the second
stage in which study is made OF the
mortgage bond societies and the mort
cage banks. 1t is expected that this
is the form of cooperative credit
which. under one plan or another, VIII
BE- proposed for adoption in the United
States in connection with President
Tafts efforts to extend this assistance
to the American farmer.
AS compared to the present Ameri-
can system OF farm land loans this
form of cooperative credit would ac-
complish two things for the farmer:
First.-lt would permit him to repay
his loan through an easy system or
amortization extending over long Pc
riod of years and would remove effec-
lively the menace OF foreclosure or
renewal which hangs like the sword
of Damocles over the head Of any bor-
TOWST from pllNdtc lhuiNiuuoA ohNSA
a short time mortgage.
Second.-It would unlock the doors
of the great money centers to the
farmer OF the remotest regions and
give security to the investor IN New
York, SO that he would need have no
concern with knowing anything Of the
roct OF security offered by the farm in
Texas or Oregon on which the money
he lends is to be spent
This means to the farmer low rates
of interest and easy terms for repay
ment What 1t would mean in more
specific terms to the American farm
er can be easily seen in comparison
of conditions in Germany OF France
and In the United States. Here is the
statement Of a dealer in land mort
cages In our southwest, made at
meeting In New York city. The
speaker was describing the business
Of company financed by British cap
ital which makes mortgage loans on
farms In the southwestern states:
I'VE have been loaning money at 8.
8 and 10 per cent. | loaned money In
the Panhandle twenty-seven years ago
and for the first three or four years
never got less than per cent month.
That Is incident to new country.
Now our bank rate is 10 per cent. Our
land loans that we have been making
the first year or SO through that sec
tier OF the country have been made
on al or per cent basis. However.
] am very frank to say that ! think
the rates ought to come down and
that we ought to be able to get money
from that section OF the country at
6 or per cent"
In comparison with this statement
the Credit Foncier Of France Is able to
loan money on farm lands at 4.3 per
cent and the German societies and
banks at about or AS per cent. AS
the speaker quoted above says, the
high rate of interest In this country is
probably to a large extent due to the
fact that 1t is new country and that
money here Is more actively employed.
1t is doubtful whether, even with the
adoption Of the European machinery,
the interest rates on mortgages could
be brought down as low In the United
States rs they are in either France or
Germany 1t Is the opinion OF no less
an authority than Charles A. Conant.
however, that they could be brought
down to per cent. A mortgage at
per cent with the advantage to the
farmer OF repaying his loan little by
little through an unburdensome plan
OF amortization might be accepted as
the sum total of benefit to be expected
by the American farmer from the
adoption Of some such system-as, for
instance. the German mortgage bank
plan.