The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1913-05-15
INVESTIGATING THE SUBJECT OF
CHEAPER MONEY FOR OUR FARMERS
The European System May
Be introduced In This
Country.

| THEAPER money for the borrow
ing American farmer is the OBJ
~ ject of an investigation recent
ly undertaken by the state de-
! partment through five of it's ambassa-
| doris in Europe.
In America the farmer today pays
higher rate of interest for his money.
! proportionate to the security which he
| offers in his farm land mortgage, than
almost any other class Of investors in
the country. In Europe the farmer
borrows on equal terms with the big
gest railroad, Industrial corporation or
municipality.
the European system in this country so
that the American farmer can raise
money on his farm through a bond
salable in any part of the country.
Cheap money. thinks Mr.. Taft, will
put it in the power of the small farm
err or the tenant who wants to start
out for himself to get his farm on
paying basis without shouldering a
| staggering burden at the outset. It
would thus do more than all else to
advance the hack to the farm idea.
It would enable the farmer to adopt
the scientific methods Of farming
which the government is teaching him
and which always costs money at the
start.
The Investigation is considered one
Of the most important undertakings
yet attempted in dollar diplomacy.
Myron T. Herrick. the newly appoint
ed ambassador to France. is Secre-
tary Knox's right hand man in the in
vestigation. Mr.. Herrck is himself
the product of an Ohio farm and has
made the problem of the farmer a
hobby for years. When the work in
Europe is completed the state depart
ment will prepare an organization
plan to fit the scheme to American
conditions, and a legislative program
will probably be mapped out for the
president to submit to congress. The
investigation is conferred about the
credit foncier Of France and the
landschaften of Germany.
The Credit Foncier.
The Credit Foncier is limited lia-
bility company operated under the SUI
pervisiop of the French government fol
the purpose of lending money to public
service corporations, communities. coun
ties and landowners and to create and
negotiate bonds based on mortgages
which are limited to the amount due
IN Tn, 0fI 1c H0r
Credit Foncier acts as an agent for the
|, French farmer, so that instead of seek
ing to raise money directly from some
local investor in mortgaging his farm
the farmer places his mortgage with
the Credit Foncier. which in turn is
. sues a bond based upon that mortgagt
; and which can be sold anywhere
throughout the country. In this wa!
the French farmer is freed from thu
necessity of borrowing in the limited
market of his own immediate vicinity
It is just this restriction which il
forcing the American farmer to pay
exorbitant rates of interest and to pu
| up with none too acceptable terms
, In this country the farmer is practical
|
, in his own community. If local condi
!, ! lions make money ''tight' there he suf
, fers accordingly. In one section of tn
. country he pays per cent interest ant
in another 10 per cent, though in boil
instances the security offered may b.
, | the same Never can he compete will
. the bonds of the big industrial corpora
! go, i,,of ho
{ curity which be offers is just as goo(
as that of the corporation.
. Two Glasses of Loans.
Two classes Of loans are offered (,
the French farmer by the Credit Fon
cier-short time loans, running from
one to nine years, and long time loans
running from ten to seventy-fve years
The rate of interest which the Frenc]
: farmer pays is only per cent per an
: mum. Loans are made on first mort
gage security only, and the loan is lin
i tied to one-half the total valuation O
!. the property upon which it is made.
+ On the short time loans the borrow
+ er pays only the interest due at tn
end Of each year and at the expiration
Of the loan pays back the principal
In the case of long time loans, how
ever, he is given better terms. Th
principal in such loans is paid back il
annuities. which are paid together wit
the interest due at the end of, eac]
= year. The annuities are spread owe
< the entire period Of the loan, so that il
e the case of loan for seVentv-fiy
years where the interest is 4.3 pc
e cent the amount due each year, interes
o plus annuity, is only 4.4S per cent, ant
t in this way the farmer is able to pa!
8 back the entire loan without great bur