Daily Kennebec journal., 1914-01-01
"HeIp for Farmers"

The ST. Louis Republic treats the
question of help for farmers" loans
on farms as a field of finance, inter
estingly and suggests mortgage banks
as a vehicle for money lending. 1t
says:
When a mine is to be opened every
body understands that a great deal
of money must be spent in dead
work. before the ore can be raised
and prepared for the smelter. Mill
ions are often spent in similar un-
productive work before large manu-
featuring enterprises can be set afoot,
and the financial system of the coun-
try is well adapted to the financing
Of such undertakings.
1t is a little remarkable that the
United States has never seriously set
about the task of financing the dead
work" which the farmer must do in
opening new country and developing
undeveloped regions. AS Secretary
Houston has said, this problem is very
different in different parts of the coun-
Try. When there was bare, level
prairie open for settlement the. settler
could slook for substantial money re-
turns for his labor inside of year
from the time he took up his land.
Land adapted to horticulture and
grazing like that in the Ozarks pre-
sents a different problem. Nursery
stock will not come into bearing be-
tween spring and fall. Breeding ami
mails are expensive and remunerative
f1ocks and herds are developed slowly.
Nevertheless the land upon which that
kind of farming can be practised is
valuable and will secure loans If the
loan is for a long period at low in
terest Commercial banks do not want
that sore of security. Their assets
must be quick There is, however,
a steady market for long-term, low
terest bearing securities where pay
ment of interest and repayment of
principal is assured. The owner OF
an improved farm can offer just that
sort of security and he gets money
without trouble and at reasonable
rates. The investing public does not
look upon loans secured upon land like
that in the OZarks as having that
character. That narrows the money
supply available to farmers in such
regions to that obtainable from local
money lenders and the borrower suf-
fers.
The problem involved here is how
to give loans upon such land char
acter similar to that of loans upon
developed land. 1t may be objected
that nature made the land what 1t
is and that no laws can improve its
value as security. The reply is that
nature made the desert and that a
desert may be good security for a
loan if there is water for irrigation
available and people ready to do the
work of reclamation.
One plan to meet the difficulty con-
templates the organization OF mort
gage banks by farmers which shall
operate under strict government sup
eryjsion. OF cour&e, this implies COM
munities in which there are Farmers
with money to invest In banking
These banks would lend money upon
land in accordance with rules care
fully prepared by the government. and
for the mortgages taken the bank
would be allowed to issue Its own evil
dences CT Indebtedness and sell them
The theory is that investors Whe
would not go to the trouble and ex-
pense Of making direct loans to the
farmers and those who are not COM
petent to engage in the difficult busi-
ness of money lending would willing
ly take such securities from mortgage
banks IL they were supervised by the
government and the loans made by
men who know what the land In their
neighborhood can do and the charac-
ter of the men who seek loans.
Upon this simple basis a plan may
be reared which will give the rela-
lively undeveloped regions OF the Unit
ed States as broad market Tor theii
securities as old and settled regions
enjoy and so provide the FUNDS neces'
sary to put unproductive ianos upon
q productive footing.