The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-01-05
BY MYROS II. HERRICk.
American Ambassador to France.

4
/ There is no more important factor
In the social and economic progress Of
\ the country than the wise develop
nent of its agricultural resources. The
social Importance of agriculture pri-
marily is due to the fact that farm
! life produces a virile citizenship; II Is
I conducive to Independent thinking and
well-considered action. The stability
of our natiosal life and the mainte-
| nance of our position great
! force for good among the nations of
! the world. depend upon our ability
! constantly to improve the quality OF
our citizenship. If this country Is to
play the part that It should in the pro-
gress Of the world. IL is essential for
us TO encourage that sort of life and
that kind of Industrial developments
3 that provides the proper environment
for "A high order OF manhood and wo-
manhood.
/ The economic Importance of agricul-
I tUre is indicated by the fact that 35.6
per cent OF all the industrial workers
/ Of the United States are engaged in
farming. which is more than three
times the per cent of those engaged
/ in commerce-the next most important
Industrial divisi )n-as measured by
/ the number of those who make it their
/ vocation. The Increasing prices Of
| foOdstuffs make IL plain that the num-
| Der of those now engaged in asricul-
ture is altogether too small. unless
their efficiency can be materially in
creased
In the last ten years the average
price in the United States of pro ducts
of the farm has increased 81 per cent.
although the increase in the average
| price of all commodities. including ag-
ricultural products, has been but %
Ser cent. 4 further. material increase
~ the prices of foodstuffs would be
serious hardship to a vast number OF
people. and " ould imperiI the econ
, omic advantage of the country. The
only sure remedy for increasing
prices of foodstuffs is a very material
augmentation in production. To
! bring about substantial increase in
4, the production of necessities there
| must be expended vast amount of
! money-yery much more than the
farmers can supply from their own
resources. and more than they can
/ obtain from existing financial insti-
tutions.
Farmers need funds for two gem
eral purposes; first for the purchase
of property and for its permanent i'm
provement. and. second, for operation.
that is. the purchase of live stock.
implements. seed and fertilizers. and
the harvesting of crops. These two
general divisions IF agricultural capt.
tai requirements should be preserved
in the nature of the loans that are
made TO secure funds. Each of these
two divisions can and should support
its own credit.
Disadvantage of Our Bank system.
For the purpose Of buying land and
permanently impro owing it. farmers
should be able to make mortgage
loans that have a long time to run
Money invested in land or permanent
improvements becomes fixed capital.
and the proportion of a farmers in
come that can properly be attributed
To this sort of capital is so limited
that il Is Illogical and unreasonable
to expect the money 50 invested to bs
repaid except after considerable
period of years Our present cpmtuer-
cial banking system is designed to
serve the needs of commerce and in
Z dustry and is not fitted to make tho
! long time loans that farmers should
be able to secure. \ commercial bank
whose deposits must be paid put on
demand must keep its assets liquid.
{ IL is clear. therefore. that such an in
stitution cannot render any considera-
bic service 10 farmers by supplying
| them with long time funds
loans now open to American farmers
, arc the life insurance companies. local
savings banks and trust companies
and brokers II is reliably reported
/ that thirteen Of the larger life inSur-
ance companies Oh January I. 1919.
had outstanding farm loans amount
ing to s439.0Oo.coe. Farm loans are
also made by Individual lenders but
the total from All Of these sources In
demands Of great numbers Of honest
and capable farmers Tor mortgages
loans - evidence that something IS
wronS and that new financial machin-
cry viii have to De created. for the
financial requirements 81 farmers are
increasing more rapidly than those OF
any other class
The only logical and practical
method for a farmer to pay a loan
secured bv his land is BY suortiza-
tiou-in other words. BY small partial
payments. regularly made. Amortiza-
ton ts the dominant feature Of the
land on 1rtEagc system Of all European
nations. The average length % tho
loan there Is about thirty years. and
NAV run for seventy gears. The
. annual sum paid b. the borrower -
composed OF the interest. tie pro rate
II the cost 20 business and au install
, rnent on the principal. and - ceiied
an annuity. n romans level VITA
the same rate Il interest through the
entire terrs % the loan. but esea year
the actual amount - interest De-
creascs. 50 that b. the cn.i q TIE
term. tho debt il wiped Ouf completely.
The perceutaee % capital % D. rcraie
each year under the arnortizatson de-
ponds upon the term % the loan. q
: course
il Thus. suppose iosn 70 - srart~a
Scontinued on fifth Psee)