Evening journal., 1914-05-21

, and the probable consuming capacity of
the rural population. Country banks
will naturdny supply suca information
] TO their correspondents in the reserve
cities and this will put the whole bank
/ ing system of the country in an even
better position than the Canadian
banks now enjoy through their branch
bank system. The good results which
viii come from such enlargement of the
I field of banking in this country can
hardly be estimated.
Since a national bank located outside
Of the reserve city will be able to as
/ sign or dispose OF the mortgages that
( it holds to investors looking for such
securities, the loans made by national
banks to farmers viii not in practice
be restricted TO the limit of twenty-five
per cent Of the capital and surplus OF
! one-third of the time deposits of the
bank, except as TO holdings at any one
time. The bank will not pledge its own
credit in assigning or selling a mort
gage TO an investor beyond the ordinary
/ pledge of good faith on its own part,
/ but the fact that a mortgage has been
/ taken by national bank in manner
conforming with the provisions of the
currency bill viii make such security
very attractive. This will be source
of profit for the bank, it will provide
ample funds for the farmers and it will
| give investors an opening for the use
/ of their capital from which most OF
/ them are now debarred. A farmer
might own the best hundred acres in
/ the State of Iowa today and yet be un-
able to borrow money on it except from
persons who live within sight of the
! land. he could not get money from an
/ investor in Chicago or New York by
correspondence because neither borrow
er nor lender would know anything
about the other. Hereafter such far
mer will be able to 90 to a national
bank in his vicinity and arrange such
loan.
Bankers are proverbially conservative
and many of them will probably hesi-
tate before engaging extensively in the
new business of lending money ON farm
mortgages. Now that the way is open
/ for them TO secure share of this very
/ desirable business they should make the
most of IT, This clause in the currency
bill has been inserted in compliance
with the wishes of the farmers Of this
country, and. if the banks do not see fit
/ to transact such business in n liberal
way the farmers viii be disappointed
and may seek 60 secure further leeisla.
tion from Congress that might be un-
welcome TO the banking community.
The farmer has TO sell what he pro-
duces in highly competitive markets and
he understands thoroughly how the
competition of the wheat growers of
Argentina India and Russia affects the
price of price of wheat i'm Chicago. He
also knows that the most competitive
/ business in all the world is the business
/ transacted in the great money mar
kets of New York, London and other
, financial centers. He has read about
cheap money. but he has never been
able TO get any Of it. and today he
looks forward with hope of relief
| through the medium of the national
/ bank which he has seen serve the bust
ness community in his market town so
efficiently in the past. Banks have done
much to bring the farmer in touch with
central commodity markets and with
/ their help ne has always been sure of
a square deal in selling staples, such as
/ corn and cotton. The banks can now
render him service quite as great by
putting him i'm close touch with the
accumulations of capital that await in
vestment in farm mortgages and other
] first class securities.