The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1914-04-06
Financing the Farmer

Financing the Farmer
The American farmer, who goes mto aeio4.
ture without credit, usually IS IN pao plight -
ordor +o own his farm or to raise money for some
necessary Improvement, he is compelled at con
siderable expense to mortgage the land. 1nAs
mortgage is for period of only five years anu
must be paid in a lump sum at the expiration u
the term Oftentimes, this occurs at 1he very
juncture when the farmer is most enoaiiassco
and finds it impossible to life the deot. li.is
means that he loses all or must remortgage 'ne
place with all the expense and trouble tna' CIR
tails. Furthermore, he is seldom aoie 10 nissNe
small loans for short times, convenience often
cried for by the necessity OF improvements TIC"
implements or moving his crops !
To remedy this condition, which has made OF
the business of agriculture rigid and unwleloy
svsten the administration is now about ready TO
introduce two bills into the House which emDody
a scheme of agricultural credits. These measures
are the fruits of Investigations OF European
methods conducted by congressional comnlt'ee'
The general plan is to create system OF farm
banks for the specific purpose of handling agrl-
cultural finances. These banks will be chartered
and regulated by the federal government. with
the exception of receiving deposits up to fifty per
cent of their capital and surplus, they Will not De
permitted to do ordinary banking business
To meet the farmers needs, these institutions
will make loans secured by mortgage for periods
ranging from five to thirty-five years. The mort
cages will be paid by annual installments' SO
scheduled as constantly to increase the proper
ton going toward principal and decrease the IN
terest At the expiration of the term, the farm
er will find his mortgage paid lnasmuch as tnese
mortgages will be approved by federal inspectors
~ 10 cC1 n
interest rates ranging from four and one-half to
six per cent and the limiting of the banks profits
to one per cent.
Special departments will be organized to care
for the short time loan or small amount made
necessary by exgencies. To move crop, pur-
chase an implement or repair building some
times demands bit more money than may be
available at the time. These short time loans
will be handled according to special method long
successful in Europe.
1t was hoped at first the banking system now
in use might take over the new functions, but
this was found impossible. Commercial banks
are adapted to the needs of manufacturing and
commerce and in order to handle agricultural
credits would have to be entirely reorganized.
Neither is it possible to use the loan systems
now in operation. In every case, these are man.
aged for the benefit of the lenders. A system of
agricultural credits to perform the function for
which it is designed must be operated for the
benefit of the borrowers.
The farmer, it is plain to see, will benefit from
a number of advantages under the new plan. He
will secure loans at much cheaper rates than at
present He will have no commissions to pay
which add to the always grievous burden of mort
cages. And every farm renter will be enabled to
become farm owner if he desires.
The most interesting angle of this proposed
system, from political point of view, is that the
federal government will be party to the bust
ness. Every bank must have federal charter
Every mortgage issued will be approved by fed
eral inspector. The government will not regulate
from without, as with the railways, but from
within. Will some good Democrat tell us how his
party is able to reconcile this with the good old
theory that the government is to keep hands
off, and let each state take care of it's own bust
ness?
Charles Sumner Bird
The Progressive nartv drew scores If mon