Cheyenne record., 1914-03-26

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capitalizing the income which he can
get of from 1t.
It 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 a neighboring
farm may. bring has little to do with
the value which is placed upon any
particular farm. The theory is and
1t seems to be sound, that the value
Of the farm is not 80 much where It
lies as 1t is what will 1t earn.
When the association has group
of these mortgages 1t pledges them
by 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 q
sense every member of the associa-
tion Is back of the bonds. These
bonds have always brought good
price even in the most difficult times
financially.
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 az
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 pay certain
sum of money which shall include in.
terest and small installment upon
the principal. In this way the mort.
gagor gradually pays of his mortgage
paying little more than the amount
which would in America be required
as interest alone. The chief advantage
to the farmer is in this fact that he
is allowed to pay of the loan by max
ing small annual or semi-annual pay
ments. Other advantages are that he
will never have to renew the mort
gage which will continue to run until
the payments have cleared the farm
Of the debt; he will never be COM
PEELED to pay any renewal commits
sion, and will never have to go to the
expense of bringing down his title or
having it examined every two years.
as Is done under our American sys-
tenn.
Reiffeson and sehulze-Delitzseh.
The Reiffeson and Schulze-Delitzsch
tions, organized upon the cooperative
plan, and are not operated for profit
to the investor. Reiffeson banks op-
crate more particularly in the coun-
try while the Schulze-Delitzsch banks
operate largely in urban communities.
The Reiffeson is the most purely Co
operative. While the Reiffeson banks
loan money for a long period OF time
they do not generally loan for so long
a period of time as do the Land.
schaften. They receive deposits from
their members, paying them interest
as do savings banks. The one at
Cassel, Germany, which can be taken
as fair representative of its type
charges 6h per cent. on short time
loans. They pay AZ per cent. on de.
posits, which are left with them for
an agreed long period of time, and
per cent. on deposits left for
shorter time. 1t Is found. however.
that the rate of interest varies in dif.
ferent places Since these banks must
meet the competition OF the Joint
stock and savings banks in each COM
munity. They generally are able to
compete successfully for the reason
their expenses are very light, their
officers usually serving without salary
and since they do not wish to make
any large profits to pay off any in
vestors as do the other banks.
Go Slow.
The best rural credit system In the
world. II actually in operation would
not prove a cure-all for our present
rural ailments. 1t would not get you
anywhere. The farmer who has ne.
gotiated loan upon the most favor.
able terms has made no actual ad-
vance. He is just where he was be-
fore. II am running a losing busi.
ness the more money I borrow the
worse off l am. II l am not produc-
ing good product which l can mar.
ket readily and profitably, the less
put into my business the better. Rural
credit without good farming and good
marketing is a delusion and a snare.
Easily obtained loans are no substi.
tutes for brains and business sense
and a marketing system.
Rural credit can do just one thing.
It can enable a man to get possession
Of a farm and the equipment with
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