The Washington herald., 1913-09-03
THE FARMER AND THE owEN.cLAss BILL

I wards section 2s as salvation. II 4.
nothing Of the kind. II is merely a rIsar,
! Of hope.
| What May he Expected,
According to the last census the total
mortgages on farms amounts to N,726,-
lT2,s51 and these MORTGAGES res, nno,,
55.6 per cent Of all farms. Therefore onIr
6S.4 per cent, being the unincumbered
| farms, could take advantage of this
| change. The value OF these for Iand
alone, Is reckoned at 81, ,OOC 600 .GOo and
over-a figure beyond all reach by the
most Wiling cooperation Of all Nationaf
Bank presidents. The reason is good
! there would not be enough to go around.
II has been estimated by the Chairman
| of the Senate Committee on Banking
! and Currency that the utmost to be ex-
pected from this section would be ESQ
O0'No. a mere drop in the bucket OF
effective capitalization, il agriculture is
to be lifted out of the rut. This little
lift shows goodness OF intention but in
effectiveness in result, for such
mortgages would not be good in securing
re-dlscounts from a Federal Reserve
Bank, therefore no bank officer Is going
TO give particularly enthusiastic atten-
tion TO this permissve feature of the
bill. He would be unwise is he did. He
wants transactions that are readily
turned into cash. These mortgages GER
tainly are not, and do not come under
the sixty-day limit on re-discounted COM
mercial paper.
II is true that the new section - fsi1bt
pages relative to National Banking As
sociations opening savings Departmental,
permits these banks to invest in mort
cages on farm lands, but these must not
have more than five years to run All Of
which goes to prove that a large proper
ton of our public men, we'll able to pro-
vide new commercial banking system.
have no clear idea of what is the matter
with agriculture. That there is some
thing seriously wrong no one can doubt
who sees the trend OF our more active
rural people to the cities. with the con-
sequent absurdity OF a great agricultural
country finding IL hard TO raise its own
food.
The Problem in Brief.
Here is, in brief, the problem:
!. The average net farm income IS
$40. 20 a year. and that small amount sell
dom taking the form of actual, tangible
cash.
. The value Of farm lands increased
from s13,o5S, co., 9s5 in 1900 to SIS .S74 1ss
in 1910.
B. Concurrently tenants increased 353
per cent OF the total number Of farms in
the ten years; and tenants represent the
hopeless element in American agricul-
ture.
l. Likewise. mortgages increased ri
per cent in the decade 1897 to 1900. and
III per cent in the decade 1900 to 1910.
The Owen-Glass bill is a commercial
banking bill. and is not lacking in thor
oughness. but It does not touch even the
fringe Of our agricultural banking prob
lem.
The farmer needs two types OF loans;
one Iong-teTm. as representing his cap
ital investment. repayable in installments
so that interest and installment together
do not make a heavy burden. and he thus
works completely free in the course Of
time: the other. short-term. representing
his annual gamble with nature by con-
troll of whose functions he is essential to
our lives. three or five year mortgage
will not meet the first need, and is too
long for the second need. The second
need will not be met by mortgage az
all. for it Is too short a term TO justify
the legal expenses OF mortgage, which.
added to the burden of interest, makes
the cost too great for the average farmer
to consider. GRIDLEf BEDE.
Monday. September .. The Farmer and tbs
Fletcher Bill"