The midland journal. (Rising Sun, Md.) 1885-1947, 1914-04-24
WILL THE BANKERS REFORM?

menL ana STOCK upon 1t. The loan may
run from forty-flve years to seventy
nine years. The borrower has his
prospective purchase surveyed and as
sessed. He makes out mortgage and
delivers it to the cooperative society.
This mortgage and hundreds of 9TH
ers like 1t are delivered to a trustee
with trust deed which pledges them
as security for series of bonds. The
cooperative society guarantees the
bonds also.
It is from the sale of these bonds
that the cooperative society obtains
its funds. These cooperative credit
associations have in the beginning no
capital whatsoever. Each is simply
an agency whose functions are to see
~ that the real estate security Of
fered is assessed at It's true value:
(2) that the title is clear; (3) that the
mortgages are properly executed;
az that they are grouped, pledged
and deposited with the trustee;
To- that the trustee issues bonds;
(6) that the land. buildings and equip
ment are properly cared for and their
value is not permitted to deteriorate;
81 that the payments of principal and
interest are promptly met.
Easy Repayment OF Loans.
The farmer pays from four to six
per cent. of the principal amount each
year. This Is not wholly interest, how
ever. for it includes small INSTALL
ment of principal, for the mortgages
are all amortization mortgages. Pay
ment Of this fixed sum annually or
semi-annually for the fixed period
therefor automatically discharges the
debt. A small amount out Of each
payment is also set aside for reserve
for the cooperative society and for
an expense account. 1t has been the
universal experience, however, that
the expense runs very low.
Still Easier for the Farm Laborer.
There are other forms Of loans even
particularly If he is one of the poorer
farm laborers. If such laborer seeks
to become a land owner on a small
scale he may under certain conditions
secure q loan for nine-tenths of the
value Of the proposed purchase, being
required to advance only one-tenth of
the purchase price in cash. The gov
eminent furnished the funds for these
loans. The conditions are ~ the bor-
rover must have been engaged in ag-
ricultural labor for five years (women
may take advantage of this law as
well as mem; (2) the land must not
exceed ten acres in extent nor $2,144
in value; (S) the borrower and pro-
spective purchaser must agree to crop
the farm in certain manner, dividing
it up into five or seven fields and fol-
lowing certain rotation of crops, thus
insuring continued productiveness and
preventing deterioration OF soil fer
tility. Under these mortgages the
borrower pays three per cent. interest
with no installments upon the princi-
pal for the first FIVE years. Then he
pays, in addition to the interest one
per cent. upon two-fifths of the loan as
an instailment upon principal, doing
this until the two-fifths of the loan is
entirely discharged. Thereafter he
pays an annual installment Of one per
cent upon the three-ffths remaining
OF the principal, this being in addi-
ton to his three per cent. interest
as before. The bonds may be issued
upon unstamped paper and are free
from tax.
Does the Danish farmer take advan-
tage Of these opportunities? Are the
tenants becoming land owners? The
facts are these: Denmark has 1850, 900
population, somewhat less than that
Of Chicago. 1t has about 500,0 900 fami-
lies, including those in cities and vii
lagos as well as those In the rural re-
gions. These cooperative credit soci-
cites have a membership OF over
100000; that is to say, two out OF
every FIVE families In the entire coun-
try are represented in them. Largely
as q result Of this credit system ninety
per cent Of the farmers of Denmark
own their own land.
How Character IL Capitalized.
Obtaining a loan on personal secur-
ity has been euphoniously termed
"capitalizing character" It Ii not an