Montpelier examiner. [volume] (Montpelier, Idaho) 1895-1937, 1914-04-03

for rural credit so cooperative
credit came and Il came % etay 10
does the work and u does e wen
The question that In up In America
is simply a question as to whether or
not the American banker Is going 70
insist that the American farmer solve
his own difficulties or whether he.
the banker IN going TO solve Il for him
and be his financial hacker
Mortgage Loans In Germany.
A cooperative loan GA long mort
cages is no new experiment One
hundred aud forty years ago thu
Landschaften we're organized in Prus-
sia, A var like period eliminating in
the Seven Years War had reduced
the greater part Of Prussia to a plti.
able state OF devastation. The own
ers OF large estates which had borne
the brunt OF tho war charges were
/ poverty stricken Hence In 1853
Frederick II issued u royal decree en-
4 Rhllng these owners Of large landed
/ estates 90 secure capital necessary 90
revive their agricultural interests by
4 Joining together Ia securing coop.
erative loan While at frst these
loans were granted TO only tho own
ers OF the large estate this system
was afterwards adapted so that the
smaller land owner could profit by Il.
Tho owner who wishes 20 secure n
loan gives a mortgage 60 tho aaNocta'
ton. He Is required to pay interest
at the rate of from three aud half
I
to two.thirds OF the value OF hla
farm. This valuation 10 arrived at by
capitaltEinR the Income which no can
get on from t.
IL is characteristic OF European
finance that tho farm values are liked
largely by consideration OF tho actual
earning capacity 81 each farm. Appar'
emily tho price which a nelghboFtug
farm may bring has little 20 do with
the value which IL placed upon any
particular farm, Tho theory 10 and
II seems 10 be sound. that tho value
OF the farm Ia not no much where Il
lies ms II ia what will tt earn.
When the association has a groug
OF these mortgages Il pledges them
by trust decd. and iAauea series
OF bonds secured by the pledge oI
the mortgages, These bonds arc then
sold and usually boar an interest oI
, from three TO three aud one.half poi
cent The association mol only pledges
the association itself SO that III I
sense every member OF the asHocia
ton II back OF tho bonds Thea'
, bonds have always brought a Eoo'
price even In the most dlfIicult umel
financially.
I The mortgage given by tho liant
! owner IN not due ~ the end Of cor
!. tain number OF years. at which tint
4 tho entire principal must be- paid Al
!. are American farm mortgages. IN
stead they run for from twenty 4
! sixty years with an agreement incoI
porated into the mortgage that eacl
4 year tho farmer shall pay a oertall
! sum Of money which shall include IN
q terest and small lnstallment upo
i the principal, Ia this way the NOR
!. gagor gradually pays OF hia mortgag
a paying little more than the amour
\ which would In America ba require
a as interest alone. The chief adVansAg
q 20 tho farmer Ii In this fact that b
il allowed to pay on the loan BY NAL
n ing small annual or semlannual pa!
y ments. Other advantages are thai b
N will never have TO renew the NOR
~ gage which will continue % run unit
y the payments have cleared the fari
% OF the debt: he will never be con
y pelled 20 pay any renewal commit
"A sion. and Will never have TO 20 20 III
m expense of bringing down bis title q
y. having II examined every two year
!, as IL done under our American ~
u tom.
Hsiffsson and Schultz. pslltEseh.
a. The Reifieson and sohulze. DeiltEsc
le banks are smaller community inatiti
ID lions. organized upon tho coopefatiV
10 plan, and are not operated for prof
10 TO the investor Relffeaon banks o.
At crate more particularly Ia the eou
ID. try while the schulze Dolltzsch banl
ie operate largely In urban eommunitie
10 The Reiheson In the most purely G
Of operative. While the ReIffsson banl
IL loan money for = long period Of tiu
IN they do not generally loan for 20 lot
a q period OF tims aa do the Ian
I'd schaften. They receive deposits fro
10 their members. paying them inteFo
to ~ do savings banks The one
RI CAsael. Germany. which can be- TAX,
~ a. . fair representative Of lie tyI
nd charges "a per cent on short tia
or loans. They pay ~ per cent On d
70 posits. which are left with them Z
On an agreed long period OF time. nj
be Z per cent on deposits left for
shorter time. II IL found, how@vs
that the rate Of interest varies fl
IN ferent places Since these banks mu
N meet the competition Of tbs toi
~ stock and savings banks Ia each col
a. mnnity. They generally are abba
- compete successfully for the reAn'
ne their expenses are very light. the
n. ofiieerm usually serving without aAla
III and since they DO not wish 70 NAL
~ any large profits 70 pay on any
~ vestorB as DO the other banks.
o. 90 Slew.
~. The best rural credit system In Il
ne world. II actually IN operation uou
ma not pToye a cnreali fyF our press
sa rural ailments. IL would not get y
la anywhere. The faFms' Who has {
'nl gotiated . loan upon tbs most fRvt
ht able terms has made no actual I
ito vance. lie IL Just where he Vas
g@@ frr@ IL mw VuunE4w : fWmfwsg ~,