The Emmett index. [volume] (Emmett, Idaho) 1893-1925, 1914-04-23
RURAL CREDITS.


President Wilson will put pressur
on congress TO create rural credit
system before adjournment this sum
mer, and if the presidents preference
is followed the proposed farm loans
will be provided through new sys-
TEN of banks organized for that pur-
pose. On the other hand are the
forces that want the government to
loan directly without the intervention
of banks, the plea being that the
farmers should be permitted to abb
sorb the profit that would go to banks
If these institutions were organized
to supply farm credit. The National
Grange, as well as the Idaho State
Grange have gone on record in favor
of direct government loans, the CAPT
tai to be obtained by the issue and sale
Of government bonds, and the money
than l per cent above the rate the
government must pay. There are sew
eral serious objections to this plan
which may defeat it in congress. 1t
creates large number of new offices,
or, if another suggestion, to avoid new
Offices, is followed, by which the local
postmaster would pass on loans or in
spect for loans, then the answer is
that the government will sink many
millions in the project, for, as rule,
postmasters are not competent and
If they were do not have the time to
make the inspection of farm loans.
Another objection urged to the
Grange proposition is that there is no
need of the governments borrowing
money to loan to farmers. 1t would
simply guarantee its loans, if it fol- |
lowed the Grange plan of borrowing |
on its own bonds to raise the money
TO loan farmers. But if it is to guar
anty its loans, why not do it as it does
with the national banks--issue the
loans direct? By the new banking
system Uncle Sam isues his own notes
and turns them over to banks, which
loan them to customers. The govern
ment might as well go directly to it
and issue its own notes in loans to the
farmers on their land, as issue its
bonds, instead of notes, and buy the
cash with these bonds to loan the
farmers.
Both commissions, that appointed
by the states and that appointed by
the president, which investigated the
rural credits systems of Europe, favor
bank loans and the amortization plan
IF payments. Bills are being drafted ]
hat will represent the views of the ,
and these views are
TO support very decidedly the
)ank loan system and the amortiza-
ion, or building and loan, principle
# repayment.
The amortization principle is the :,
most vital necessity in a reform of >
ural credit. 1t is the regular, easy :,
'ayment plan which relieves the debt
r of the fear of foreclosure or the :,
alling due of the debt at an inoppor-
une time which gives him confidence v
0 attempt to carry through the con- \
ract
While the presidents federal COM %
Mission opposes loans for terms run =,
ing over a generation, yet it favors !,
term of 50 years and amortization !.
the loan, so that in that period the :,
IAN will "pay itself off" Rates will -
e very low by this plan, the Western :,
lrmer who borrows $4,000 or $4,000 :,
r $1,000 on his place paying some
ling less per annum than he now
avs for interest alone, and the loan
ling thereby gradually extinguished
credit system Of that nature will
icourage farmers to develop. inn
rove and enrich their land as for the
ost part they neither will do nor can
J under the system of short term
Oh interest credit endangering their
lip on their titles.