The citizen. (Honesdale, Pa.) 1908-1914, 1913-01-03

Would Not Be the Case if He Were
Able to Enjoy the Benefits of the
System--Life Insurance and Credits.
Myron 7. Herrick, United States am
bassador, obtained leave of absence
from his post at Paris mainly to urge
before the recent convention of the
Association of Life Insurance Presi-
dents in New York the adoption Of a
financial plan for the relief Of the
farmer, who is now paying about $780,
100000 in interest. He told the insur-
ance men that the psychological mo-
ment has arrived for the adaptation Of
a plan from the European system for
financing rural credits in this country
In this connection the ambassador sug-
gested the creation Of a life insurance
plan to cover the Indebtedness in the
event of the death Of the borrower
"This subject of agricultural cred
it's" he said, while of great magni-
tude, is really, after all, not intricate.
The operation of the Credit Foncier,
the Landschaften, the Raiffeisen and
hundreds of kindred institutions for
land and personal credit so eminently
successful and beneficial in their re-
suits in Europe can be very easily ex-
planned. 1t is simply an application Of
the story of the bundle Of sticks tied
together-singly, easily broken; togeth-
er, able to withstand any pressure.
villages, municipalities, cities in
America are really fungous growth on
the country. They are the natural out
growth of the fertility Of the soil
They are dependent upon it for life
for existence.
The Credit of the Village.
''The village, in order to maintain
schools, make streets. build waterworks
and lighting plants and other munic-
ipal utilities, pledges the united credit
of the municipality, the security ex-
tending over long periods. This is done
by aid of legislation, which also pro-
vides restrictions as to the amount of
the loan, etc. In other words, it is Il
financial 'setup' created by legislative
authority, and the result is magical in
its effect.
"As soon as this security is created
by uniting the credit of the municipal
ity it becomes cosmopolitan in its ma
ture. Instead of depending on the home
market it has become current security
in any money center Of the United
States at a low rate of interest.
Were it not for this legal authoriza-
tion of the arrangement it would de-
pend on the local market and neces-
sarily little or no improvement could
take place, or at least it would be slow.
cumbersome and expensive. Incon-
sistent as it may seem, the result is
that that which is an artificial growth
on the country has broad and secure
market, while the Countrywide great
country itself, which produces and is re-
sponsible for the existence of the vii
lagos and the municipalities and the
cities-has local and restricted market
and insufficient capital to promote its
legitimate advancement.
every year the farmer is spending
something like $250y000,0 900 more for in
terest than would be the case if he
were able to enjoy the benefits of this
system. The sum which he expends in
interest should be applied to the de-
velopment Of the country. 1t has been
estimated by good authority that he
needs Immediately for legitimate de-
velopment of the soil more than 50 ,OOO,-
100000
at only needs the application Of the
alert minds of the Americans to work
out and adapt these systems, for the
oil har, Il
when it is necessary for it to be done.
Will Unlock Vast Capital.
"There are large accumulations of
capital which are now restricted to 10
cal communities for investment, being
permitted to be applied only to munic-
ipal bonds and securities of that class,
aside from local loans. When this Sc
curity is created and put into the same
category this vast capital will then be
unlocked for this investment.
"In the creation of rural securities
l have considered with especial inter
est the embodiment of life insurance
plan. 1t would undoubtedly be of great
value to have the debenture, or secu-
rity, accompanied by such a policy,
which would insure the liquidation of
the Indebtedness in case Of the death
of the borrower.
This is the usual practice where
land and buildings are mortgaged. A
fire insurance policy accompanies the
mortgage and becomes a part of the
bond security. In case of the maturity
of the policy by fire the money is to
be paid to the holder thereof as his in
terest may appear
"The introduction of the life insur-
ance policy in agricultural credits is
undoubtedly sound economic propo-
sition, Furthermore. it would give the
rural community, which is almost o
virgin field for life insurance. an un-
derstanding of the value of life insur-