The Celina Democrat. (Celina, O. [Ohio]) 1895-1921, 1914-04-03

real estate mortgages When farmer
bOrrows to buy a farm and gives a
mortgage for the loan there is no rea-
son why it should not be long time
amortization mortgage permitting re-
payment in annual or semi-annual
payments extending over ten, twelve
or twenty years.
Gilt Edge Security.
A good first mortgage on real estate
running for a considerable period OF
time is recognized the world over as
a gilt edged loan. Financiers are ac-
customed to advise it as the safest in
vestment for trustees, widows and
others who are not able to pass upon
the character of miscellaneous invest
ments.
The president Of one OF the great
life insurance companies makes the
statement that his company in its his
tory of forty-six years has loaned
$133 1898, 549.44 to 1902 farmers, Sc
cured by mortgage on 11,462,363 acres,
the average loan being $1,782. The
net loss after paying all costs, fees.
assessments and penalty interest
rates was fourteen-hundredths OF one
per cent This is substantially the
history of all properly organized farm
land mortgage business. Some $780,
100000 in farm mortgages are carried
by our life insurance companies-an
amount equal to 35 per cent. Of the
total farm mortgages shown by the
census.
II a farm loan for three years Is a
good loan, one for ten or fifteen or
twenty years is good, too but no
American bank makes these long
loans. Why? We have never been
able to get any adequate answer to
this question: The general response
is an unsatisfactory one, ut isn't good
banking to make such long farm
loans" which is another way Of say
ing what we have said before, that
the city banker will not meet the
needs of the farmer borrower.
There seems to be therefore no rea-
son why this fact that a long time
farm loan is gilt edged loan should
not be taken into account in fixing the
interest. 1t Is not possible that the
interest on these loans should be near
the rate which is received upon bonds,
either municipal or industrial. The
city banker will investigate fully the
integrity and earning capacity of
every factory that wants loan. Is
there any reason why the American
banker should not put himself in q
position to investigate the honesty and
earning capacity Of the farmer who
needs money, thus permitting him to
capitalize his character as do bankers
abroad? On the whole after looking
over the situation at home and abroad
it is not surprising that the farmer
sometimes suggests that bankers
might well study their own activities
rather than to be butting in upon the
farmers business.
No City Market for Them.
But suppose a country banker in
Rusk county, Wisconsin, does loan
$50, 900 to fifty farmers on fifty of the /
finest farms, taking back fifty mort |
cages which are gilt edged in every |
sense. He wishes to make more loans |
and there is in his community de- |,
mand for more money. Can he sell |
or otherwise raise money on these !
fifty mortgages from the city banks
In Madison, Milwaukee or Chicago? |
Not at all The city banker will con-
cede that they have probable value
but the city banks have no system |
for handling these rural mortgages.
The country banker finds that it is
easy to send the farmers money from |
the farm into the city, but mighty diff
ficult to get any city money out into
the country for the farmer. City Sc
curities be they based ON blue sky |
or financial cats and dogs, have in |
the city value, much or little as the
case may be, but still definite known |
value. But good gilt-edged farm mort
cages are financial outcasts. They are
outlaws.
After all we repeat the thing most
needed is an adjustment Of banking
methods to rural business needs.
Bankers could solve the farm credit
problem IL they would. But so long
as they prefer to leave the study of
their own work (Which the farmer
thinks they do not understand) and
insist on telling the farmer his busi-
ness (Which the farmer knows they
do not understand, there is little hope
for them. They are driving the
farmer to his own solution of his own
difficulties. One state legislature
made up largely of farmers has at
tackled the problem and over the pro
test OF the bank members has made
some progress. More will be said
about this later.
Over here in Germany the bankers
we're formerly as slow as those OF
America are now to meet this demand