The Idaho recorder. [volume] (Salmon City, Idaho) 1886-1927, 1914-01-15
INVESTIGATION
OF FARM CREDITS

as chairman of CONN ittee TO In
Vsstigate the subject of farm credit!
with a view TO recommending bill
for the consideration OF the next leg
isiature, has 6een in the city fol
some days past consulting with thS
governor and others on the subject
In discussing the matter Mr.. Sunder
land said:
Il may say for the COMMITTEES that
it is NV making an investigation oil
the agricultural credit system If Eu.
rope, especially the land mortgage
credit association known as the
Lsndschaften., for the purpose oil
ascertainiDg whether mortgage
credit system cannot be devised fer
Idaho that will tal guaranty To cred
itors better and saf4r securities, and
O. afford better terms to the borrow
ers.
The Landschaften credit as
spciations OF Europe may De regard
ed as highly organized associations Of
borrowers with collective guaranty
for obtaining capital from third per
sons, says the report to the British
board of agriculture and fisheries of
an inquiry into agricultural credit
aud agricultural cooperation in Ger
many. by using bonds secured by
mortgages on the properties Of all
the members they create a security
reaizable at any time. and far supe-
rior, therefore, tn mere individual
mortgage security.
"The main advantages of such "a
system of collective bargaining are
thee, viz: ta) tile borro ~ers place
themselves in a position TO offer u
better security; (bl they place them
sevies III a position to obtain loans at
greatly reduced rates of interest; lc)
they have long period OF years for
the payment of loans. Besides there
are nuu erous minor advantages.
I'm placing themselves in a posi-
tiJn to offer better security, the bor-
rowers float bonds or bonds hypothe-
Gated upon mortgages which covtr
the properties OF all the borrowers
and members. That is 90 say the
loan which any member OF the credi
association may obtain is secured by
a bond or mortagage bond, as We
may term 1t, embracing not Cnly the
property OF the individual borrower,
but the properties of all other mem
bers OF the association. Inc joint
properties of all members are liable
for the payment of these bonds until
full payments have been made by all
borrowers on their joint ur collective
loans, This plan uf collective bar
gaining may seem undesirable to the
average Idaho landowner bat when it
is RENE N bered that the members of
the credit associations through their
proper officers supervise the making
and payment of the loans. aud the
ass citation has a lien upon the indi-
vidual properties of the borrowers il
does not seem quite so. Even SO, the
general plan is now in operation ia.
the state Of Idaho and other western
states and is operating successfully.
Collective loans are made al
greatly reduced rates OF interest. be
cause the securities of all the horroN-
ers and all the members OF these as
sociations is much uetter than the
security which any single individual
borrower could advance. Then, too.
these loans are negotiated at a mini
mum expense. There are no nigh
salaried officers to pay for their serv-
ices, and toe charge is only sufficient
to cover the actual costs ut opera
ii IN.
The fact Ihat bonds are fioated for
long period OF years-l0, 20, or 30
years gives the borr wers abundant
opportunities, without extra charge
attaching thereto, to psy the ioans.
And, as rule, they nave The priv
llege of paying of the loans in in
stallments uuder what IL known as
the amortization plan, during which
years the payments gften tiges in
crease from year to year as Iae loans
are being paid of, the theory oeing
that the longer the loans run the bet
ter able the borrowers should ba to
pay them.
The general result OF sucn a state
OF collective bargaining among the
far ning classes Is that "a they nave
reduced tne cost OF living, ana 10
navs enlrenched and fortified them.
selves, - have labor and csb.taI. in
competitive business matters, n. for
example, IN tbe purchase Of supplies
aud the sale Of produc
" The benefits that will come in the
Unitsd States from such s1st4m Of
orgsniEsd farmers societies ara far
reaching and almost limitless. AFFECT.
ing as they sill cur entire econou,ir
society. We talk Of reducing the c7st
OF living, but where. have we a great.
er opportunity than throUsh the or.
ganization Of farmers societies Tor
collective bargaining:
The problem Shieh how eonfr@pts
the commercial and legislative bodies
in rna Tinted St les that ar Incl