Omaha daily bee., 1916-10-31
Administration and Farmer
William Stull


braska farmer or banker, or to have some well an
thentcated facts presented to support the wis
dom and practicabiity of the rural credits sys-
tenn, were likewise disappointed. Instead they
heard an especially well worded argument or
apology for what the present administration had
done failed to do for the betterment of agri-
culture or increased profit to the farmer.
What struck most forcbly was familiar
ring so to speak running through the whole
discussion, something akin to the memory of
half forgotten dream. Those who happened to
be in close touch with the farm mortgage bust
ness twenty-five years ago. soon realized that
his most fetching" expressions were used by the
publicity department OF those farm loanng COM
panies, which flourished in the late eighties and
went bankrupt in the early nineties.
A brief history Of those concerns may not
be out of place.: In 1881 or 1882 Benjamin
Lombard jr., shrewd New Highlander. with
large business experience and an abundance Of
capital and credit, entered the western farm mort
gage loaning fields. Things were too slow to
suit him. He characterized the business method
Of those long in the business as obsolete, old
foggyish, ETC., and soon proceeded to inject gilt
tering ideas into his business methods. The first
OF these was to incorporate his business and to
offer the guarantee Of his corporation to offset
the business experience and reputation Of such
and Taft and others, who had for years before
been selling, and for years afterwards continued
to sell, farm mortgages on their merits, backed
only. by the experience, the good name and in
tegrity of these men.
This new idea doubled and trebled the Lom-
bard business, but it was not until he launched
the debenture bond idea, identical with the rural
credits propaganda, that he out-distanced his
most successful competitors. Stimulated by his
example, new companies sprung up like
ready to take stock in them. Some Of the best
business men In the United States took part in
organizing and conducting these companies.
These companies were differed by the best bank
ers in their respective localities. They secured
the best ability for salaried positions that money
could command. One Nebraska man was offered
a larger salary than that OF any bank president
in Nebraska, outside if not inside of Omaha, if
he would accept position with one of these
companies ts ..
These companies were capitalized at from
$4,000 to $5,000000 each, and were scattered
from Boston to San Francisco. 1t was in the let
tiers and advertisements Of these companies that
the expression used by Mr.. Quick were found The
following are some Of them: I'VE are offering
for the first time an ideal investment for the
laboring man in the shops and factories of
America" "Debenture bonds secured by first
mortgages on the best improved farms, in
amounts Of from $4,000 to $4,000 each This
avoids the inconvenience of receiving small pay,
ments difficult to invest" with absolute
safety, the danger of non-payment is nil, etc"
! am not accusing Mr.. Quick of pagiarisms,
but simply suggesting startling coincidents
Why did Mr.. Quick lay such heavy stress on
the absence Of hazard in the debenture bonds if
not to alay fears on the part of intelligent farm
ers concerning the double liability which at
taches to the stock, which they are compelled to
rural credits bankf He trips lightly over the fact
that every farmer who borrows $4,000 pledges
ST, 600 to apply the payment of any and all
bad loans made in the United States under the
rural credits law. For the benefit of prospective
borrowers he did say, in substance, that there was
no possibility of loss on any debenture bond is
sued. Also that every dollar paid for stock would
be refunded to the farmer.
OF all that army Of mortgage companies who
were selling debenture bonds by the million
twenty-five. years ago, not one of them has
vived to offer debenture bonds today. Practically
every one of them ended in bankruptcy, and had
a double liability attached to the stock of those
companies as it does to the farm land bank stock
which the farmers are compelled to buy if they
get rural credits money, it would have bankrupted
some of the best bankers in the west and seriously
embarrassed hundreds more.
AS to the debenture bonds themselves, not
one issue out OF twenty was ever paid in full as
promised and millions Of dollars invested in
these by the poor widows, orphans, factory hands
and others, were entirely lost. These bonds were
frequently offered at auction in New York and
Boston and seldom sold for more than 10 cents
on the dollar. That debenture bonds issued in
denticay the same manner by banks managed
| by political appointees would prove any better
than they, no sane business man will believe Yet
Mr.. Quick proclams that loss is impossible; that
the risk taken by the holders of rural bank stock
as we'll as owners of debenture bonds will be nil
| OF course, it was not part of Mr. Quck's
| business to explain to the Nebraska farmer why
! live hogs in South Omaha during the years 1913
| and 1914, sold for $500 per hundred and sold for
only $6.88 per hundred during the year 1915. Dur
ing the month of August, 1914, when the Euro
| pean war broke out the average price of live
| hogs in South Omaha was $500 per hundred. As
| soon as the war became an actual fact the price
| of pork sold the consumer steadily advanced,
| while the price of pork sold by the farmer stead
lily decreased in price Yet when the stocknlen
| of the west asked congress to investigate the
meat trust that honorable body turned deaf
| ear President Wilson, when the Adamson trades
| union bill was passed. assured the tranmcn that
| they, the highest paid class of manual laborers
! connected with the transportation system, would
continue to receive this advance wage brought
| about by the bill. He also assured the railroad
presidents that If the earnings of the road were
| not satisfactory to them that he would favor AN
advance in rates. Does our good president look
| upon the wage scale and the stock dividend as
| the only thing sacred in American commerce?
| How will the measures promised by him. if car
ried out affect the thrty-hve millions of the
| American farmers, who are not receiving one
| fourth as much per hour as these tranmen or the
| thirty or forty millions of the consuming public,
| salary and wage earners (outsde OF these unions)
| be affected by such course? How much will
| increased wages to the train men and increased