The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1914-05-05

credit. NO PRIV lSIcA - VI
the short-term or personal lending
Following the European example. the
committee has practically decided to
nave two separate institutions. ana
that the model for he personal loan
will doubtless be along the line OF the
Jewish cooperative credit unions
hich l described in a recent sSue OF
Golfers.
Even while Congress is bordering
over these measures Uncle Sam has
begun the relief of the farmer. Under
the terms of the new currency bill
national banks may now discount
farmers paper, which tends TO create
a more liberal lending policy toward
the tiller OF the soil. In addition
these banks may lend money on farm
mortgages not to run over five years
nor to exceed in total amount - per
cent of their capital stock. or SO IL
| per cent of their time deposits.
Nor are other signs wanting TO indi-
| cate a whole new and constructive at
titude toward the financing Of the
farm. Various States have begun to
work out the economic salvation OF
their agricultural class. In New
York. for instance, Governor Glynn
has sent an impressive message to the
Legislature urging the formation OF
land banks. He pointed out z the
startling act that while the urban
population Of the great Empire State
had increased Is per cent in ten years.
the increase in rural population had
only been l per cent. During the
same time there was a decrease Of 5
per cent in cultivated farms. These
facts alone would be sufficient to eX-
plain the increased cost of living. The
decline in farm interest was due to
only one thing, and that a lack OF
adequate financing. This. too. in the
very State that is the fountain head
of American money power.
The farm mortgages Of New York
State present a very Illuminating OBJ
ject lesson. The farms la a total
debt of $10O, 900, 900, secured by liens.
If for these mortgages were substi-
tuted ten-year amortization loans at
6 per cent. and with an additional
yearly payment to cancel the debt at
maturity, the farmers would save not
less than $24, 00O, 900.
Tho Investor and the Farmer.
But this dawning rural financial
millennium will not be complete until
the average investor with his small
saviygs-and by him I mean the man
or woman with s. stuck away in q
corner. $40 in a savings bank, or $50
in a building and loan association
can link his destiny with the farmers
financial relief. Sue an investor
as is the case with his European
brother-will not put his money in
the ~debentures Of a with
small capitalization.
EOr this reason men like Leonard
Robinson. father Of the Jewish CO.
operative credit unions whose dollars
t are SO neighbOrly. have urged that
r the best way to bring about this union
2 of farmer and investor is to nave one
t huge central bond-issuing bank, or a
limited number Of regional banks per-
forming the same service. The mort
| cages from the whole century could
: be deposited in these banks, and thus
there would be a nationwide blanket
e Of security behind the ~debentures. A
drought in one community or a de-
a vastating flood in another would net
disturb the general character of the
: equity.
e These banks, in the opinion OK the
men who are favoring them, should
have large capitalization and a rigid
governmental supervision to inspire
confidence. Most OF the trustees, as
in the case Of the Federal Reserve
Board, could be appointed by the
q President.
But whatever the plan employed
the big fact is that the proposed lanC
bond will bring to the average Ameri
y can investor a long-needed medium
because it could be issued in small
denominations to suit the humbles
saving. 1t would have ample interes
rate, safety, and marketability-ths
:, three cardinal requisites. The bis
n f%nancier is beginning to realize tina
= the baby" bond is the real invest
ment hope of the nation.
he There is even a wider vision il
this proposed issue of mortgage de
bentures to relieve the farmer. The,
could draw on the whole would. an,
especially attract the continental in
Is Vestor who is only getting an averag,
i of 3 per cent on his Credit Foncie
and kindred land bonds. Thus ",
20 could father a Security tina woul,
wipe out the stigma of Frisco finanC
ing and re-establish the integrity o
- the American investment abroad.
After many years of hardship tn
81 farmer seems to be coming into hi
- nnanCIal own. Ready money for hin