Mexico weekly ledger., 1915-02-25
We COULD GMORTZE
At 81 PER CENT THEN
New Word, Now in Use Means Much
To The Farmers Problem
OF Finance.
GARDNER BILL Is EXPLAINED
Would Pay Interest and Principal At
The Same Periods, Taking Leas
OF Time.
GARDNER BILL is EXPLAINED

Il begins to look as II Missouri may
amortizo at 81 per cent.
"Amortize" is a new word in the vo-
cabulary of Missouri, but it's a good
one. 1t got into the Missouri Ian
guage when the land bank plan began
to be discussed and II mean that the
mortgage is going 10 have a erimp
put in it and the terrOrs of the tradi-
donal 'blanket" are going TO disaP-
pear.
What the word really means is that
a farmer can borrow money to make
farming what it ought to be and that
he a have about all the time he
wants to pay it back, the interest will
be low and when he gets through, in
stead of owing the principal. he'll find
that he has paid of the loan along
with the interest.
For instance, according 10 the
Gardner farm bank plan, now being
considered by the Legislature, a far
mer could borrow $1,000. pay $e5 a
year for rs years and then be free
from debt The s65 would have taken
care Of theinterest and principal.
It sounds like a fairy story to the
farmer who has been struggling along
under a heavy mortgage and giving
up all his profits to the money lender.
but it is a plain, practical plan. 1t
has been in use in Europe for a long
time, and Col. Frederick d. Gardner,
of st. Louis, who has evolved the plan
now before the Legislature, made a
thorough study of the European plans
and adapted them to the conditions in
this State. His system has received
the appreciation Of experts, and is be-
ing accepted everywhere without
question as being safe and sane.
And the colonel is not standing by
to get a profit out of the plan, either,
because he wouldn't have a thing to
do with the bank. 1t would be a state
institution, managed by the State
banking department, the dealings be-
ing directly between the State and the
farmer. The State would make no
profit and the farmer would get the
benefit - remembering always that
every one gets a benefit when the far
mer prospers.
The loans would be made in sums
ranging from $3.50 to $4,000, with a
preference for those under $4,000.
The money would be secured by a
mortgage on the farm at half its APP
praised value, and the money could be
used for increasing the production Of
the farm, paying of old mortgages or
buying a farm, making useful i'm
~provements, or buying stock or impl-
ments up TO one-fourth the amount Of
the loan.
The great need Of some system Of
farm credits is seer In the facts that
Missourians are leaving the farms IN
droves. For the ten years prior to the
last census the agricultural counties
Of this State lost in population at an
amazing rate. Atchison county's pop.
~ulation slumped more than II per
cent, and the whole State, outside Of
Kansas City and st. Louis, lost 2 per
cent in population.
Farm conditions the farmers are com
planning, are intolerable. The farmer
does not have a modern home, he has
to worry about finances and he has in
sufficient working capital. What ne
needs is more money to finance his
business. If he had that he would be
in a position to have better homes and
more profitable farms and would stick
to the job of feeding the nation.
The plan calls for a capital of
$1,0O0,000 which would be loaned by
the State and would be returned later
when the reserve fund, created by the
loans themselves, would reach that
amount. The 81 per cent, charged
on the loans, is divided as follows:
4.3 per cent for interest, Y per cent
for the reserve fund, and II per cent
to apply on the principal. 1t has been
determined that this amount would
: amortize the loans as follows, igur-
, ing, for convenience, on a loan of 500.
An annual payment of $22.50 would
pay of the 500 in 5 years; an annual
payment of s12.4O would a it off in
10 years, or 1910 in Is years, or $3.50
in 20 years or $3.50 in 25 years.
This would be made possible by the
saving in commissions, examinations
OF title and all the other expense con-
nected with the renewal Of loans-a
waste that amounts in Missouri to
S%SOO,OOO annually, while the rate
charged now makes the interest
amount to about 2 IL million dollars
more than under the land bank sys-
tenn proposed by Col. Gardner.
With this 3,25O.OOO--saved by this
system-in his pockets, the farmer
would feel better toward rural life
than he now does.
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ID EAnrn