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

credit came and II came 10 stay. Il
does the work and Il does It 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 II for him
and be his financial backer.
Mortgage Loans In Germany.
A cooperative loan on long mort
cages is no new experiment. Ooe
hundred and forty years ago the
Landschaften were organized in Prus-
STA, 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 1863
Frederick II issued a 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 II.
The owner who wishes to secure a
loan gives a mortgage to, the associa-
ton. He is required to pay interest
at the rate Of from three and a half
to four per cent. and may borrow up
to two-thirds of the value OF his
farm, This valuation Is arrived at by
the income which he can
get Off from 1t.
1t is characteristic OF European
finance that the farm values are fixed
largely by consideration Of the actual
earning capacity of each farm, Appar-
emily the price which neighboring
farm may bring has little to do with
the value which is placed upon any
particular farm. The theory is and
It seems to be sound. that the value
of the farm is not so much where Il
lies as 1t is what will 1t earn.
When the association has a group
Of these mortgages 1t pledges them
by a trust deed, and issues a series
of bonds secured by the pledge OF
the mortgages. These bonds are then
sold and usually bear an interest OF
from three to three and one-half per
cent The association not only pledges
the association itself so that in a
sense every member Of the associa-
ton is back OF the bonds. These
bonds have always brought a good
price even in the most difficult times
The mortgage given by the land
owner is not due at the end of GER
tain number of years, at which time
the entire principal must be paid as
are American farm mortgages. In
stead they run for from twenty to
sixty years with an agreement incor-
porated into the mortgage that each
year the farmer shall Tay a certain
sum of money which shall include in
-erest and a small installment upon
the principal In this way the mort
sagor gradually pays OF his mortgage
paying little more than tire amount
which would in America be required
as interest alone. The chief advantage
10 the farmer is in this fact that he
IS allowed to pay off the loan by max
ing small annua! or semi-annual pay
nents. other advantages are that he
will never have to renew the mort
gage which will continue to run until
he payments have cleared the farm
If the debt; he will never be COM
)elled to pay any renewal commits
sion, and will never have to go to the
expense of bringing down his title or
laying it examined every two years,
Is IS done under our American sys-
EN-.
Reiffeson and SchuIze-Oelitzseh
The Reiffeson and Schulze-Delitzsch |
yanks are smaller community institu-
ions, organized upon the cooperative |
,Ian, and are not operated for profit
o the investor Reiffeson banks op- |
rate more particularly in the coun-
ry while the SchulEs Delitzsch banks
perate largely in urban communities.
he Reiffeson is the most purely Co
perative. While the Reiffeson banks
pan money for long period Of time
hey do not generally loan for so long
period Of time as do the Land
chaften. They receive deposits from
heir members, paying them interest
s do savings banks. The one at
asset Germany, which can be taken
8 a fair representative of its type
harges 61a per cent. on short time
oans. They pay Az per cent. on de-
osits, which are left with them for
II agreed long period of time, and
per cent. on deposits left for a
horter time. 1t is found, however,
lat the rate of interest varies in diff
erent places. Since these banks must
leet the competition Of the joint
took and savings banks in each com
lunity. They generally are able to
ompete successfully for the reason
leir expenses are very light. their
ncers usually serving without salary
nd since they do not wish to make
ny large profits to pay Off any in
estors as do the other banks.
Go Slow
The best rural credit system in the
orld, if actually in operation would
OF prove a cure-all for our present
lral ailments. 1t would not get you
nywhere. The farmer who has ne
otiated loan upon the most favor
BILE terms has made no actual ad'
ance He is just where he was be-
IRE. II | am running a losing bust.