Daily capital journal. (Salem, Oregon) 1903-1919, 1915-10-20
Expert Tells of the
Unbreakable Farm Bank
By David Lubin.
GU. S. Delegate, International Institute
of Agriculture, Romeo
(Written for the United Press.)

(Written for the United Press)
New York, Oct. lJ.-When President
Wilson declared that "the question of
Rural credit is the most vitality import
ant problem confronting the American
people today" he certainly knew
whereof he spoke.
You farmers who go blindly on from
year to year, letting financiers dictate
whether you shall have enough cash at
reasonable interest with which to run
your farms, are doing q very foolish
and unnecessary thing.
Yesterday | told you how you could
fern an efficient National Marketing
organization with ramifications in ev-
cry township in the country.
Today | am going to show you how
you can form National Rural Credit
System along the same lines. A system
owned and controlled, not by bankers,
not by business or professional men,
nor by anyone whose interests would
conflict with yours-but owned and
controlled absolutely by you-The
Farmer.
What | tell you here is nothing but
facts about a system which, in the Isl
years it has been in operation in Ger.
many, has rot known single failure.
Its monds now, hold their own as they
always have, whether in normal or in
abnormal times. Why2 Because its
bonds are based upon the land itself,
which no one can harm; and they are
bonds issued by the farmer himself.
The system is known as the. Land
schaft. You can adopt and adapt it in
the United States if you will. You
would thus have your own organized
financial cooperation under charter
from the Z. s. government. You and
group of your neighboring land.own.
ers, after getting the charter would de.
termine the actual cash value of your
combined landholdings. Say it was
$5,0O0,OO0
You would issue on eacn mortgage,
bonds to be sold in the open market
on security (your $5,O00,0oO worth of
land being the security, so sound that
you will readily dispose of them at or
above par. The bonds would draw 3 to
per cent and run from 80 to rs years.
Who, you ask, will be the buyers!
Your neighbors: The butcher, the
shoemaker, the widow with mite to
invest; all people with small savings or
large. The security for so small as a
800 bond is still your $5,OOO,O0O worth
of land. That land is the capital stock
of your borrowing association.
The security farmer Bill Smith gives
to this organization, lin which he is a
partner, by the way, is a mortgage on
his particular land. Under this system
there are no lawsuits because the
farmer S mortgage is rendered equiva.
lent to a judgment against the land,
which the organization itself would en-.
force, If necessary, to collect.
Before tnis system could be success
tully operated in the United States.
however the national government
would have to pass legislation prohibit.
ing further questions of landtitles on
lands of these corporations, and also
tor determining the soil.valuation of
each section. State law changes would
also be necessary in this connection.
However, this is the only real solu.
ton of the problem of rural credit.
why do you not get your congressional
representative in line on it2 Also your
state legislaturel
Hou will find some of the moneved
interests opposed to all this, for in.
stance, the mortgage money. lenders.
but the other and large moneyed in.
terests of the country will favor this
system because it will put you on a
prosperous basis and therefore increase