Cheyenne record., 1914-03-26

him to seek loans elsewhere. or will
he meet the needs of the farmer.
There is little Goubt that the banker
could give longer time on safe per
sonal paper. There is little doubt
that he could arrange for long time
real estate mortgages. When farmer
borrows to buy 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 considerable period of
time is recognized the world over as
gilt edged loan. Financiers are ac-
customed to advise 1t 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
$133,83S.549.44 to 75,102 farmers. Sc
cured by mortgage on II, ,462.36S acres.
the average loan being $1.7s2. 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
amount equal to 35 per cent. OF the
total farm mortgages shown by the
census.
II 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. 1T isn't good
banking to make such lc:s farm
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 long time
farm loan is gilt edged loan should
not be taken into account in fixing the
interest. 1t fs 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
M {tu nj 90 rnfn0 Nffv 0f
every factory that wants a loan. Is
there any reason why the American
banker should not put himself in
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
1t is not surprising that the farmer
sometimes suggests that bankers
might we'll study their own activities
rather than to be butting in upon the
farmers business.
Over here in Germany the bankers
were formerly as slow as those OF
America are now to meet this demand
for rural credit. So cooperative
credit came and 1t came to stay. 1t
does the work and it does 1t we'll.
The question that Is up in America
is simply question as to whether or
not the American banker is going to
insist that the American farmer solve
his own difficulties or whether~he.
the banker is going to solve 1t for him
and be his financial hacker.
Mortgage Loans In Germany.
A cooperative loan on long mort
cages is no new experiment. One
hundred and forty years ago the,
Landschaften we're organized in Prus-
sia. A war like period eliminating in
the Seven Years War had reduced
the greater part of Prussia to a pitt
able state of devastation. The own
ers of large estates which had borne
the brunt of the war charges were
poverty stricken. Hence in 1769
Frederick II issued royal decree en-
abling these owners of large landed
estates to secure capital necessary to
revive their agricultural interests by
joining together in securing coop
erative loan. While at first these
loans were granted to only the own
,ers of the large estate this system
was afterwards adapted SO that the
smaller land owner could profit by 1t.
The owner who wishes to secure q
loan gives a mortgage to the associa-