The Tucumcari news and Tucumcari times., 1914-03-25

sia. A war like period eliminating in
the Seven Years War had reduced
the greater part OF Prussia to pitt
able state OF devastation. The own
era OF large estates which had borne
tho brunt OF the war charges were
poverty stricken. Hence In l76B
Frederick II issued royal decree Ell.
abling these owners Of large landed
estates to secure capital necessary to
revive their agricultural interests by
Joining together In securing a coop
erative loan. While at hrst these
loans were granted to only the own.
ers Of the large estate this system
was afterwards adapted so that the
smaller land owner could profit by II.
The owner who wishes to secure q
loan gives a mortgage to the associn-
ton. He is required TO pay interest
at the rate OF from three and a half
TO four per cent. and may borrow up
TO two.thirds OF the value OF his
farm. This valuation 10 arrived at by
capitalizing the income which he can
get on from II.
finance that the farm values are fixed
largely by consideration OF the actual
earning capacity OF each farm. Appar.
emily the price which neighboring
farm may bring has little TO do with
the value which is placed upon any
particular farm. The theory is and
II seems to be sound. that the value
Of the farm is not so much where It
lies as IL is what will IL earn.
When the association has n group
Of these mortgages II pledges them
by trust deed. and Issues a series
OF bonds secured by the pledge of
the mortgages. These bonds are then
sold and usually bear an interest of
from three TO three and one.half per
cent. The association not only pledges
the association itself so that In a
sense every member OF the associa.
ton Is back OF the bonds. These
bonds have always brought a good
price even In the most difficult times
financially.
The mortgage given by the land
owner is not due at the end OF q Ger.
tain number OF years. at which time
the entire principal must be paid an
are American farm mortgages. In.
stead they run for from twenty to
sixty years with an agreement incor.
porated into the mortgage that each
year the farmer shall pay q certain
, sum OF money which shall include in.
terest and a small installment upon
the principal. In this way the mort.
| Sagor gradually pays off his mortgage
paying little more than tho amount
which would in America be required
as interest alone. The chief advantage
TO the farmer Ia in this fact that he
is allowed 10 pay OF the loan by max.
ing small annual or semi.annual pay.
ments. Other advantages are that he
will never have to renew the mort.
gage which will continue 70 run until
the payments have cleared the farm
OF the debt; he will never be com.
! pelled 70 pay any renewal commits
/ sion. and will never have 10 go TO the
expense OF bringing down his title or
! having II examined every two years,
| as Is done under our American sys
TEN.
ReiHeson and sehuIze. peiitzseh.
The Re!ffeson aud Schulze. .Deiitzsch
banks are smaller community institu.
tions. organized upon the cooperative
plan, and are not operated for profit
70 the investor. Reifeson banks op-
crate more particularly in the coun.
try while the SchIlze-Delltzsch banks
operate largely In urban communities
The Reireson Is the most purely CO.
operative. While the Reireson banks
loan money for long period OF time
they do not generally loan for 30 long
a period OF time as do the Land.
/ schaften. They receive deposits from
their members. paying them interest
as do savings banks. The one at
! Cassei, Germany, which can be taken
as a fair representative Of It's type
, charges Ga per cent. on short time
/ loans. They pay ~ per cent. on de-
| posits, which are left with them for
an agreed long period of time. and
per cent. on deposits eft for q
! shorter time. II ~ found however
that the rate OF Interest varies 10 cii.
ferent places. Since there banks must
meet the competition ~ the !O.lt
stock and savings banks IL ssch can.
munity. They generally are able 70
compete successfully for the rssson
their expenses are very lign, tks.F
officers usually serving without salary
and since they do not WISH - make
any large profits 70 pay y" sIy liz
vestors as do tEe other bspn.
Go SLOW.
The best rural credil system ~ ugs
world. II actually In operation .y.4a
not prove a cure-all for our yysssL ,
rural ailments. II would not gel ycg
anywhere. The farmer who rae ls-
gotiated loan upon the most izycr.
able terms has made no actual sd.
vance. He Is just where he was ~,
fore. II | am running a losing bust.
ness the more money borrow the
worse on ! am. II am not produe-
L..