The Birmingham age-herald., 1915-08-19
Cattlemen Told of Problems in Making Loans on
 Stock
THREE FACTORS ARE
 TO BE CONSIDERED
Integrity of Maker, Capital Invest ment of Land and Equipment and Proper Choice and Use of the :
 Security Are Factors

Probably the biggest feature of yester- day session of the Southern Cattlemen' s association was the address last night by Wirt Wright, president of the National Stock Yards bank, National Stock Yards (St. Louis marl<eD. III.
 The keynote of nearly every discussion before the convention yesterday dealt in some way or other with the problem of financing the cattle industry of the south in the future. In fact, tentative plans are under way among certain influential | members of the association now in ses- sion here to organize a stockmen's bank with a capital of at least S1,00o,00O to finance the cattlemen of the south. This was distinctly referred to by Presi- dent F. I. Derby In his address before the convention yesterday morning and re- port is that the movement may come to a focus before the convention adjourns this time and that the bank in all prob ability will be located in Birmingham. if organized.
 It is this financial phase of the cattle industry with which MT. Wright, one of the country's leading bankers. and especially an expert on cattle financing. deals. His address in part is as follows:
 From Bankers StandpOlnt
 ''What kind of cattle loan is safe for the cattleman himself and for the bankef who makes the loan? Right here, if my remarks are not approved. I trust you will recall that I am talking from a bankers standpoint, and that bankers are supposed to have chronic cases of cold feet as a matter of principle. Re- member that bankers are loaning other peoples money. not their own. The prime requisite is that the loan shall be paid.
 When you secure a loan from your banker for any purpose whatever, you put more or less of psychology into eff feet You present to him arguments and facts that establish a conviction in his mind that you will do what you promise namely, pay back to him in due course the money or credit which he loans you. You establish confidence in his mind What are the essential convincing factors in the case of loan for handling cattle? There are three of them-first, the man himself; second. his plant and equipment in other words, his capital investment; third, the security offered, that is, the cattle.
 First the man. Is he honest? Men, integrity and honor are worth more than oil the cattle and all the money in the United States. A prospective borrower may have limited capital, his security may not afford all the margin that a first-class bank loan should have, but if his business and personal dealings have been above reproach. he has gone long way toward estAblishink credit. And if he has not integrity. he has failed to find the one pearl of great price, for which a man should sell all that he has Added to integrity should be ability. A cattleman should know his job, he should understand how to handle cattle. neither too few nor too many. We should know the class of cattle for which his feed and his equipment are best adapted. Some bankers claim that an honest darn fool will do more damage than a crook.
 Now, there are certain evidences of thrift and successful management which are convincing. If the banker knows that the proposed borrower is diversity ing his crops, is keeping his soil rich, has his fences and improvements in good repair, carries insurance on his build ings grows a large proportion of what his family and labor eat, as well as his chickens and milch cows, as we'll as beef cattle, he may be fairly sure that the loan risk Is a good one.
 Diversified farming, according to the government report on July 1, has enabled the south to gain 286.000.000 bushels of wheat this year. Nearly 30 per cent of the countrys increase in W Hcdl pIOduCtiOu tIllS year may diti- inate1y be accounted for in the south. Diversified farming in any country is safe farming and makes safe loans The farmer who does not depend upon any enc item of production from his farm shows ability to be added to integrity. in the sum total of convincing argu- ments to be presented to his banker.
 As to Capital Investment
 "Again, the cattleman persuades the banker by the showing he makes as to capital nvestment-that is. land and equipment. You would not expect a man to engage successfully in manu- featuring or merchandising without a proportionate investment of his own money in a plant or store. This done, the banker can legitimately loan cred 1t for the purchase of raw materials and to pay labor in one case or to buy a stock of salable goods in the second case. In both instances. the products sooner or later find their way to the consumer and the loan Is paid.
 The same argument applies to the reasonable financing of the cattle busi- ness. Sufficient land should be owned 10 accommodate the cattle and to raise feed for them. This constitutes the capital investment upon which the profits of the business are calculated as income. The higher the price of land,
 
 this statement you have the reason for the remarkable opportunity now pre- senting itself to the south. You have here a country with wonderful nat ural vitality for sustaining live stock. You have an abundance of natural grasses You can produce feed for fin- ishing cattle You have ample mois- ture and a short, mild winter season.
 But tho stocSmen should not ex- pect credit where this capital Invest ment in land, or a safe equity in land. Is not present Doing business on a 'shoestring' is speculation, and all bankers are warned by present day thought against speculative loans. If YOU have no capital, but have experi- ence and ability and energy to ex- pend in the cattle business, hunt part ner,' not a bank.
 "The third consideration of the bank CT Is the security-we are talking about