Fulton County tribune. (Wauseon, Ohio) 1883-1925, 1914-04-03


does the work and 1t does it well.
The question that is up in America
is simply a question as to whether or
not the American banker Is going to
insist that the American farmer solve
his own difficulties or whether he,
the banker is going to solve it for him
and i,e his financial hacker
Mortgage Loans in Germany.
A cooperative loan on long mort
cages is no new experiment. One
hundred and forty years ago the
Landschaften were organized in Prus-
sia. A war like period eliminating in
the Seven Years War had reduced
the greater part of Prussia to pitt
able state of devastation. The own
erS of large estates which had borne
the brunt of the war charges were
poverty stricken. Hence in 1859
Frederick II issued royal decree en-
abling these owners of large landed
estates to secure capital necessary to
revive their agricultural interests by
joining together in securing coop
erative loan. While at first these
loans were granted to only the own
ers of the large estate this system
was afterwards adapted so that the
smaller land owner could profit by it.
The owner who wishes to secure
loan gives mortgage to the associa-
ton. He is required to pay interest
at the rate of from three and half
:. he prrrI
to two-thirds of the value of his
farm This valuation is arrived at by
capitalizing the income which he can
get off from it.
1t is characteristic of European
finance thaT the farm values are fixed
largely by ipnsideration of the actual
earning caescity of each farm. Appar-
emily theAe4ice which a neighboring
farm may bring has little to do with
the value which is placed upon any
particular farm. The theory is and
it seems to be sound, that the value
of the farm is not so much where 1t
lies as it is what Whit earn.
When the association has a group
of these mortgages it pledges them
by trust deed, and issues a series
the mortgages. These bonds are then
sold and usually bear an interest of
from three to three and one-half per
cent. The association not only pledges
the association itself so that in a
sense every member of the associa-
ton is back of the bonds. These
bonds have always brought a good
price even in the most difficult times
financially.
The mortgage given by the land
owner is not due at the end Of GER
tain number of years. at which time
the entire principal must be paid as
are American farm mortgages. In
stead they run for from twenty to
sixty years with an agreement incor-
porated into the mortgage that each
year the farmer shall pay a certain
sum of money which shall include in
terest and a small installment upon
the principal. In this way the mort
gagor gradually pays off his mortgage
paying little more than the amount
which would in America be required
as interest alone. The chief advantage
to the farmer is in this fact that he
is allowed to pay off the loan by max
ing small annual or semi-annual pay
ments. Other advantages are that he
will never have to renew the mort
gage which will continue to run until
the payments have cleared the farm
Of the debt; he will never be com
PEELED to pay any renewal commits
sion. and will never have to go to the
expense of bringing down his title or
having it examined every two years.
as is done under our American sys-
TEN.
Relffeson and SchuIze- Delitzsch.
The Reiffeson and Schulze-De Delitzsch
banks are smaller community institu-
tions, organized upon the cooperative
plan, and are not operated for profit
to the investor Reiffeson banks op-
crate more particularly in the coun-
try while the Schulze-Delitzsch banks
operate largely in urban communities.
The Reiffeson is the most purely Co
operative. While the Reiffeson banks
loan money for a long period of time
they do not generally loan for SO long
schaften. They receive deposits from
their members, paying them interest
as do savings banks. The one at
Cassel, Germany, which can be taken
as a fair representative of its type
charges 61s per cent. on short time
loans. They pay Az per cent. on de
posits, which are left with them fol
an agreed long period of time, and
4 per cent. on deposits left for q
/ shorter time. 1t is found, however
that the rate of interest varies in diff
ferent places. Since these banks must
meet the competition of the joint
stock and savings banks in each com
munity. They generally are. able tc
compete successfully for the reason
their expenses are very light, theil
officers usually serving withoutssalary
and since they do not wish to make
any large profits to pay off any in
vestors as do the other banks.
Go Slow.
The best rural credit system in ths
world, if actually in operation woulo
not prove cure-all for our presen
rural ailments. 1t would not get vol
anywhere. The farmer who has ne
gotiated loan upon the most favor
able terms has made no actual ad
vance. He is just where he was be
fore. If am running losing bust
ness the more money l borrow tn,
worse off l am. If l am not produc
ing good product which l can mar
ket readily and profitably, the less
put into my business the better. Rura
credit without good farming and goo,
marketing is a delusion and a snare
Easily obtained loans are no substi
tutes for brains and business sens
and a marketing system.
Rural credit can do just one thing
1t can enable man to get possession
of a farm and the equipment wit
which to farm. If the farming bus
ness into which the loan launches hir