The Ronan pioneer. [volume] (Ronan, Mont.) 1910-1970, 1915-10-22
WHY BONDS ARE NOT SOLD;
WHY THEY WILL SELL
By A. D. Stillman.

I The organized Farmers OF montana
thru their state organization last Win
Ter secured the passage of the Farm
Loan Law. They secured it's passage
thru reluctant senate and thru the
house whose speaker was farm mort
gage broker and who bitterly opposed
the passage of the bill. In order to
avoid creating new office in an al
ready Office burdened state, the law
made the state treasurer Commissioner
of Farm Loans and carried an ample
appropriation to enable him to put it in
operation, Thru the press Of the state,
without compensation, | advised the
farmers Of the law S general features,
leaving to the state treasurer under his
salary the task of bringing the bonds
TO the attention of the investors so that
the money would be ready for each
series as they were offered.
Farmers needing money got busy and
made applications that were approved
for several hundred thousand dollars,
When about seven months had expired
and farmers who had tied up their
property were clamorng for their
money, | commenced to stir things up
and found that the state treasurer was
secretary-treasurer of private bank
ing corporation dealing in farm mort
cages and selling six, seven and eight
per cent mortgage debentures in oppo-
sition to the five per cent bonds issued
under the Farm Loan law.
found that the state treasurer had
made no intelligent effort to present to
of the per cent Farm Loan bonds. |
found that he had published an adver-
tisement in one paper in every county
in the state, but it was so vapid and
colorless that it did not attract atten-
ton and, if it had, the advertisement
would scarcely have caused any investor
to investigate.
While the advertisements to sell
these bonds were confined to one paper
in each county, the state treasurer,
about the first of October, published
lengthy article in almost every paper
in the state, trying to show why these
bonds could not be sold, and why the
law is failure. The entire failure. he
claims, is because the rate was per
cent. 1t is patent to everybody that
competition of per cent state bonds
with Mr.. Rae's own per cent de-
bentures would not be nearly so serious
as would the 5 per cent bonds.
Upon Mr.. Rae's showing, as recently
published, bond dealers and brokers re-
fused to handle these state bonds be-
cause of the low rate of interest. If
the investor would be satisfied with
5 per cent, the middleman would want
l per cent or more, and this, of course,
must be added by way of additional in
terest to the borrowers load. So they
clamored for 6 per cent or more.
1t was the intention of the legislature
that the state treasurer, as a part re-
turn to the state for his salary, would
save to both the borrower aud the in
vestor the profits that would other
wise 90 to the middleman.
Following are some of the reasons
why these state farm loan bonds can
be sold right here in the west without
troubling Chicago or the "Bankers or
Big Insurance companies
l. The bonds net 5 per cent and are
not subject to taxation in Montana.
They are especially good for residents
of Montana.
2. The state has appropriated and
set aside $25, 900 with which to pay in
terest and each installment of prin-
cipal when due, whether the farmer,
whose land is mortgaged, has actually