The Delta independent., 1913-10-17
MONEY is FURNISHED CHEAP
BY FRANCE TO ITS FARMERS

Though it is not the farmer who Is
at fault, still it is the farmers who
must pay the fiddler. For every dollar
lost in investments in American farm
mortgages it will be just that much
harder now to establish a mortgage
banking system that can bring low
interest rates to farmers. Therefore
it is essential to secure just as strong
backing for farm mortgage bonds as
possible. The confidence of investors
must be secured: for the more faith
they have in the bonds the lower the
interest rates with which they Will be
content. And to secure that conf
dence the organization standing back
of the bonds must have the strength
of Gibraltar. What is 1t that secures
a government bond? It has the name
OF the government back of It. 1t
would not be practicable to place I'm
bonds. since 1t would increase his OBJ
legations to the danger point. weaken
his credit among nations, and involve
him in a banking business which 1t
is his wise determination never to
touch. But 1t would be a good thing
to place back of those farm mortgage
bonds a power as nearly equal to I'm
Gle Sans as could be obtained. 1t
would be good to take advantage Of
Uncle Sans strict supervision and to
~ hiUb
Standing that the government would
be willing to invest funds In it for
instance the funds accumulated
through the postal savings banks. II
that could be done there would prob
ably not be much trouble in selling
mortgage bond at low rate of in
terest
For these reasons 1t would seem
beneficial, II not essential, to construct
mortgage banking system for the
United States along national lines,
Some of the larger states might get
along successfully by themselves but
the majority of them could hardly
hope for a national. and none OF them
for an international, market for their
mortgage bonds. A statewide market
would not be adequate in most in
stances and there does not seem to
be any argument In favor of state in
stitutions over a national instition,
provided a way can be fohnd for the ma
tional institution to offer first-class
service to the farmers of all states.
II must be admitted that an indepen-
dent state institution which could
serve the farmers well would be in
fintely preferable to national insti-
tuition but far greater strength than
the state.
In Germany the mortgage associa-
tions are provincial institutions for the
most part which would correspond to
statewide association of farmers In
a national association In Germany was
not successful, because of the peculiar
organization of the association which
depended upon a representative con-
troll. In Germany the work was start
ed century and half ago and the
provincial institutions, with the long
handicap they enjoyed. together with
the legal privileges extended them.
were able to build up prestage that
made national institution practically
unnecessary. Moreover Germany has
not the same money problems that are
found In the United States where
there Is one rate of interest on one
coast and a different rate on the other.
In France the American commission
had an opportunity to study an entire
Iy different type of mortgage system.
The Credit Foncier OF France is dis