The river press. [volume] (Fort Benton, Mont.) 1880-current, 1914-09-23
The River Press
Published every Wednesday Morning
by the Rirer Press Publish
ing Company.
CHEAP LOAN SCHEMES

All APoSuAS vi NASNSA ~
is made in a bulletin issued by the
United States department of agricul-
ture. which says certain loan cOmpan-
les are promising farmers cheaper
money than anybody else is able to
get on equally good security. The
eagerness with which some are ac-
cepting the bait is one indication of
the need there is for a sound system
OF rural credit. 1t is not wholly the
fault of the farmer who is taken in.
A great deal of mental energy, COM
bined marvellous skill, is expended in
preparing soul-compelling circulars
which seem to promise the farmer
everything, but really promise him
nothing. If so much thought and skill
were exercised in trying to convert
sinners, we should be very near the
millennium.
Stripped of verbiage and words
which darken rather than enlighten,
the scheme is essentially as follows:
Such a company offers to lend you
money on good security at, say 3 per
cent. interest. and to allow you to
repay the loan in easy monthly in
stallments on the amortization plan.
This sounds alluring, and. if you are
not too persistent in asking what you
are to get and when you are to get
it, you sign an application for a loan
on these favorable terms. In a few
days you receive from such a COM
pany a contract for the loan for which
you applied. The contract which you
receive is duly signed by the officers
Of the company. Then you realize
that the application signed by you
and the contract signed by the Off
GERS of the Company together cOnsti-
tute a valid contract. and that you are
now in for it.
Under the terms of the contract you
are to begin at once paying off the
debt of. say. 81 900 at the rate of $40
a month, but you have not got your
$1,000 yet. Moreover. you do not
know just when you will get it. The
only thing you know is that you have
got to go right on paying $40 a month.
You have, however, the promise that
whenever the company has the money
to spare. you will get your loan. An
other way of saying the same thing
is that when your turn comes, you will
get it. This means that such a COM
pany has not got the money now, and
that there are several other gentle
men whose turns come before yours.
AS fast as the company gets money
it lends it out to these men each in
his turn. When your turn comes, if
the company lasts that long. you will
get your money.
Now, where does this kind Of COM
pany get the money which it is going
to lend to you and the other gentle
men who signed these contracts ?
Why, it gets it from you and those
same gentlemen, and from no one else.
Speaking to all of you collectively, it
says, in effect, "Gentlemen, this COM
pany has no money of its own, but if
you will pay your money into it's treas
ury, we will then be glad to lend it
back to you, if you will give good Sc
Curity. on very favorable terms"
II such a company ceased getting
new contracts, it could not lend you
your thousand dollars until you had
paid in a thousand. If you will take
your lead pencil and figure awhile
you will find that in order that you
may get your loan within a year
there must be about ten times as
many applicants next year as there
We're this. In order that they may
get their loans within a year, there
must be ten times as many applicants
the following year as neX year, and
so on indefinitely. Now. if there are
1000 applicants waiting for loans
this year.. in ten years there would
have TO be, at this rate, 10, OOO, OOO.-
100000 new contracts in the tenth
year. This is nearly seven thousand
times the present population OF the
earth.
i'ut il you and al the applicants
arc "',i;ng 70 wait five years for your
loans it would only take 1924, 900
no'v contracts iii the tenth year to
keep the COMPANY going. BY the
thirteenth year there would have to
b" $4,000 new applications. There
ars about $500, 900 farms in the Unit
cd States. If there were several COM
pal.ies like this operating on our
farmers, yon a see that the compe-
tition among them would, by that
time. become what might be called
severe.