The Washington herald., 1913-09-08

at his disposal for a long term OF years
with his land as security, and those
| smaller amounts OF current funds that
can be taken from and put back into a
bank as soon as used for a part-season
or seasons activity. The first of these
financial Conveniences is worked out in
Europe and cleverIy in Germany. for the
advantage OF the landed gentry; the sec
ond is worked out for the advantage OF
the peasants. The Fletcher bill combines
these two, 10 render them available for
the development OF American agricul-
ture by free and self-reliant farmers.
Bonds Based on Land.
The first kind Of money, IL the Euro
pean system is adopted. means that lands
of clear title can become the basis for
bonds secured by the land. approved by
the local rural bank, the State rural
bank, and the national rural bank. These
bonds thus secured and indorsed would
be as good financial investment as are
the bonds OF other activities, and would
represent in the farming effort some
thing akin to the sensible bonding sys-
tenn which has been worked out by rail-
roads. These bonds would have many
years to run Gn Europe, sometimes as
much as seyenty-five years.. The pay
ment OF interest yearly, added to a small
amount to be applied to the reduction
of the face of the bond, would mean that
in course of time the property on which
the bond was based would be completely
paid for. without the owner of the land
at any time having to meet the burden
of the whole amount in a large lump
sum; in other words, the bonds would
be "amortized," as the expression is.
Under the guidance of the men in the
local rural bank all of whom would feel
responsible for agricultural development
On lands that were bonded, the money
secured by the sale of bonds would be
used in a way to make the farm perma-
nently productive. or, in some cases, TO
set the farmer free from obligations that
were pressing upon him and preventing
fun speed ahead on productive effort.
Compare this kind of money with the
money represented by the ordinary mort
gage, and the difference will be seen
Immediately. When a farmer mortgase-
his land either to rect debts or TO under
take development Ae mas placed upon his
money an almost impossible task, namely,
its investment in farming activities in
such a way as to realize in three or five
years both capital and interest. In view
of the fact that the average farm income
of the United States is 5000, it is easy
TO see that with a slow producing me-
dium like land, whose results are gen.
average farmer to think of promptly lift
ing the mortgage and being free from its
burden.
His additional disadvantage is this:
That when the proceeds of the mortgage
are placed in his hands, it is impossible
for him to engage" the whole amount
at once in any effective crop campaign:
and consequently the part that he can
not use is a burden, depressing the ac-
tivity of the part that he can use. This
explains in a few words why the ordi-
nary mortgage system as practiced in
America does not tend to make a more
free and Independent farming spirit, but
is the kind that oppresses with care and
anxiety and has tended, because of its
defects, to make the strong
trend of vigorous farming elements to
the city. where real money can at least
be touched and handled and its results
tasted, even though in the long run the
general advantage of the country is lost
to those who are swarming to the cities.
The money that is needed for tempo
rary requirements should never arise
from a mortgage of the land itself. In
Europe, cooperative rural credit for the
quick activities OF a season places the
small farmer exactly in the same posi- |
ton as a merchant is placed in in this
country when his credit is good with his |
local bank. He is able to use money ad- |
to him by his bank quickly and
throw it back again into the bank, where |
no burden of interest is piling up Some |
thing like this must be worked out in
America. The Fletcher bill proposes it. |
bp the formation of local rural banks, |
whose cash activities will be confined to |
a small political unit, as, for instance, |
a magisterial district. The managers of
the local rural banks will be those lead |
ing farmers who know their community |
and who will be interested in securing |
for each other the advantages of bank |
ing facilities. Then the farmer, with |
his capital investment represented |
in the bond on his land, will, through !
local confidence, be able to embark in |
annual productive campaigns, and actu- |
ally see and handle cash or its equiva- |
lent.
Such a system will Immediately tend to |
produce a more businesslike method of
conduct on the part of the average far
mer. because his sole hope OF accommda- |
ton win rest upon the confidence that
his neighbors have in his efficiency as a !
hller Of the soil. Likewise It win COM