Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1913-02-07

aSSOcldtlOn, anu the BoFerHIneHt Hd
nothing to do with 1t. The banks &C
as q unit. and such things as panic b
reason Of bank failure, Is unknown, q
1t Is In the United States, where 4
time of stress each bank stands alone
refuses extensions and calls loans t
pile the actual cash up In their vault:
and issues clearing house paper as i
1907. Now what can South Carolin
do to avert such a condition Of affairs
Shall we await the action OF Demo
cratic president and congress, or shal
we push ahead and try to devise a sys
tenn of our own, and through cottol
get access to the Banks Of England
France and Germany, who are nov
furnishing money indirectly to bu.
our cotton? Something must be don
to give relief to the agricultural ele
ment. ...s-E
Why Not Deal Direct With Our Gus
toners in Europe?
President Taft has given informa
ton to the country as to the European
system of cooperative credits, which
Is making France and Germany rich
er and more powerful every day. Tht
underlying principles are the same a!
are written into this warehouse plan
with this difference: This bill seeks tc
convert the products Of the soil into
a commercial security as negotiable
as the bonds and stocks Of the rail-
way, steel trust and other corporations
The European system does not dea
with the products, but the land Itself
and II seems to me that we could read
lily adapt It to our needs In the south
so as to apply to both land and Its
products. At any rate, have gone
far enough to feel 1t Is worth investi-
eating before we irrevocably commit
ourselves to anything. This country
has Just now reached the period that
confronted Europe 100 years ago. OF
an enormous population, with worn
out soil. Germany and France nave
well nigh solved the problems ano
surely we would do well to heed the
lesson. Census figures show that
within twenty years the town popula-
ton has grown 25 per cent faster than
the country. This has attracted at.
tention from students, statesmen and
patriots, and has caused deep research
into the underlying causes. The de-
partment Of state has been gathering
information, and q delegate, Mr.. David
Lubjn, has been sent to the 1nterna-
lional Institute Of Agriculture to be
held in Rome next December. The
last meeting Of the Southern CONNER
cial congress recommended that q COM
mittee consisting Of two from each
state be sent abroad to investigate the
land loan schemes that are operating
so successfully among the agricultur-
lists of France and Germany. The
president of the United States has
written a letter to the governor OF
each state, enclosing report from
the American ambassador to France,
which I think 1t will be we'll worth the
while Of each senator to read. There
are two types Of these agricultural
banks, one for character and personal
property credits, and the other fol-
land loans.
In reading these papers, the thought
struck me how wonderful are the nat
ural resources of this cotton country
that has survived a barbarous LAND
mortgage system and the extortions OF
q lien and crop mortgage law, whose
underlying thought has ever been 70
"size the pile and take 1t ALL. Undel
the German Landschaftan or the
Credit Foucier Of France such thing
as personal mortgages are unknown
ON page IT of his report the ambassa.
dor says: The whole theory OF the or
ganization of land credit Is based upor
the debenture bond and system Of
amortization and sinking fund devised
and Introduced BY the Landschaftan
One without the other two Is useless
The three must be combined and also
coupled with wise management under
wise laws in order to attract STEADY
flow of cheap money to agriculture
II is remarkable that this truth has
never been realized or applied to the
United States for farm mortgage
loans. In spite of the example OF
practically every nation in Europe foi
generations, the lending Of money or
mortgage still remains largely mere
brokerage business unrestricted Dy
proper laws, either to individual OF
corporations, while mortgages con-
tinue to be drawn for three or five
years, when experience shows that the
average life of loan is far In excess
and needs to be renewed again ano
again, with added expense to the DEBT,
or. Amortization Is simply a methoo
of paying Off loan by returning ht'
tie Of the capital each year. These
payments are called annuities, ana are
composed Of the interest and contribu-
ton to the sinking fund and the cos'
of conducting. business. They are
PCliONS Va AASAA 49,
seyenty-five years. and at the END OF
the period the mortgage debt becomes
extinguished, and the property returns
to the owner free and clear from all
membranes. The prevailing interest,"
rate on amortization mortgages IN
France Is at present per cent. by
adding a little over three per cent to
this, and paying n per cent per annum
a French farmer can extinguish MS
debt within twenty years"
Freneh W.. American Farmer.
Let US suppose a case Of French
farmer who borrows $4,000. He
pays $3.50 annually, which covers MS
4 per cent interest and the sinking
fund expenses. At the end OF the
twenty year period, he has PAID IN.
terest and expenses, $4,000, and MS
debt is cancelled. Who can estimate
what a South Carolina farmer woulo
pay on $4,000 for 20 years with In
terest computed annually and PAID III
advance? When he gets the money al
plain, straight simple interest, ne
would have paid $4,000 in Interest
alone and would still owe the original
$4,000, making $4,000 against the
French farmers $4,000. Now what
would a loan of $4,000 to run for ~
years cost the average South Carollns
farmer? It Is hard to say.
No bank in the state or institution
that know Of would make loan foI
20 years. Five years at per cent
payable annually, would be about the
best he could do and trust to luck tC
get renewals, and in each case would
probably have to pay bonus to ge'
some one else to carry the loan. the
largest business Of this kind Is done by
insurance companies, and do moi
know that I could better illustrate the
point than by telling Of an actual case
that came under my observation.
It Is insurance money, but trus'
company makes the loan on q mort
gage at per cent. The borrower Is
required to insure his life and assign
the policy as additional security. A
bonus Of 2 per cent Is paid to the
broker who negotiated the loan, and
500 to the attorney who fixed up the
abstract of title, making $1,100 taken
out in advance. The annual interes,
Is $500, and the premium on the ife
insurance about $500, making $1,4OC
per year on a loan Of $4,000, to say
nothing of the expenses and difficulties
of making new arrangements at the
end of each five-year period. Al tne
very best 1t would foot up $2S,3Oo
paid in actual interest, life insurance
u