The Emmett index. [volume] (Emmett, Idaho) 1893-1925, 1914-01-08
PROPOSES FARM CREDIT
SCHEME FOR IDAHO
Borrowers Combine to Furnish
Good Security and Get
Low Interest Rate

iHlIIet W investigate tlS ouDJSSb VI
farm credits with view to recon-.
mending bill for the consideration
of the next legislature, says Of the
progress of the committees work:
"The committee is now making an
investigation of the agricultural cred
it systems of Europe, especially the
land mortgage credit associations
known as the "Landschaften," for the
purpose of ascertaining whether a
mortgage credit system cannot be de-
vised for Idaho that will guaranty TO
creditors better and safer securities
and at the same time afford better
terms to the borrowers.
"The Landschaften' credit associ-
atoms of Europe may be regarded as
highly organized associations of Dor
rowers with collective guaranty for
obtaining capital from third persons"
says the report to the British board
of agriculture. "By issuing bonds
secured by mortgages on the proper
ties of all the members they create
security realizable at any time, and
far superior, therefore, to mere in
dividual mortgage security.
"The main advantages of such a
system Of collective bargaining are
three, viz: (a) the borrowers place
themselves in position to offer bet
ter security; (b) they place them
selves in a position to obtain loans
at greatly reduced rates of interest;
(3) they have long period of years
for the payment of loans. Besides
there are numerous minor advan- !
tages.
"In placing themselves in posi-
ton to offer better security, the Dor
rowers float bonds or bonds hypothe-
Gated upon mortgages which cover the
properties of all the borrowers and
members. That is to say, the loan
which any member of the credit as
ISOLATION may obtain is secured by a
bond or mortgage bond, as we may
term it, embracing not only the prop
erty of the individual borrower, but
the properties of all the other mem
bers of the association. The joint
Of all members are liable
for the payment of these bonds until
full payments have been made by all
borrowers on their joint or collective
loans. This plan of collective bargain
ing may seem undesirable to the av-
erage Idaho landowner, but when it is
that the members of the
credit associations through their prop
or officers supervise the making and
payment of the loans, and the associ-
alton has lien upon the individual
of the borrowers it does not
seem quite so, Even so, the general
plan is now in operation in the state ,
IF Idaho and other western states and
IS operating successfully.
collective loans are made at
greatly reduced rates of interest, be-
:ause the security of all the borrow t
RS and all the members of these as
;ociations is much better than the a
security which any single individual
could advance. Then, too,
hese loans are negotiated at a mini
mum expense. There are no high
alaried officers to pay for their SER I
ices, and the charge is only sufficient
o cover the actual costs of opera
ion.
The fact that bonds are floated for Il
long period of years-10, 20 or 30 Il
'ears-gives the borrowers abundant
opportunities, without extra expenses =
TEACHING thereto, to pay the loans. .
md, as a rule, they have the privi- A
eye of paying off the loans in INSTALL
lents under what is known as the r,
mortization plan, during which years
ayments oftentimes increase from B
ear TO year as the loans are being
aid off, the theory being that the
niger the loans run the better able
AZ NSAANNNAo oiouiu NC W pay NhSHls
"The general result of such state CO
collective bargaining among tire %
irming classes is that they have re- ~
aced the cost of living, and have
ltrenched and fortified themselves,
5 have labor and capital, in eomper-
i've business matters, as, for exam n
lie. in the purchase of supplies and d
he sale Of produce. VI
"The benefits that will come in The p.
nited States from such a system of
-ganized farmers societies are far
and almost limitless, affect
q as they will our entire economic
'ciety. We talk Of reducing the cost ~
living, but where have we greater =
'portunity than through the organi- ~
Ition Of farmerb societies for col =
ctive bargaining? =
"The problem that now confronts =
e commercial and legislative bodies ~
the United States that are inves-
eating and considering this prob
"a is, how can the system be applied