The Watertown weekly leader. [volume] (Watertown, Jefferson County, Wis.) 1912-1917, 1916-10-18
FARMERS COSTLY COMMISSIONS.
To Be-RepIacd Only by a Hold-up
Through ENDORSED Purchase of
Joint Stock at Double Its Face, as
Condition OF Securing Loans.


wrote me of Tom Edgely's success in
borrowing money from the Life In
surance Company, through Squire
Brown | was not surprised either
that Tom got a higher appraisal on
his farm than the Federal Land ap-
praiser allowed. You see the Carpet
Dagger" had to play safe; he had no
personal interest at stake in making a
large loan-he is paid a fixed salary.
II he allowed too high appraisal he
might involve the bank in future loss,
and SO he would lose his own job, on
the charge of incompetence or bribery,
or something He was undoubtedly
instructed by the officers of the Fed
eral Land Bank to be very conserva-
tive in his appraisals; they, too, a"e
on salary. and have no interest i'll
making profitable loans. They get
their appointments through the Farm
Loan Board at Washington, and their
chief concern is to be conservative and
get all the security they can pick on
all loans.
is interested in putting over as big a
loan for Tom as possible, for he gets
commission. so he serves Tom on
his own appraisal of the farm, know
ing that the loan is safe, because he
knows local values and Toms farm,
he also knows that Tom is a good
farmer and making a profit, SO that
the loan is desirable one and he
can well be liberal in making it, both
for the sake of his own commission
and to accommodate his friend Tom
Edgely.
AS a matter of fact, there is not
much risk i'll that, for even if Tom does
add $1,000 to the cash value of the
farm, the loan is only half of the ap-
praised value, and we all know that
the price of land is going UP each year,
as the country is settled.
But who pays Squire Browns COM
mission? Tom gives a first mortgage
at per cent to the Insurance Com
pany, and a second mortgage at 2 per
cent to Squire Brown, that second
mortgage is the Squire's commission.
So Tom pays the commission, and as
the loan is going to cost him per
cent with a commission of 2 per cent
a year for five years, it makes nice
little profit of 10 per cent on the
loan for the Squire; besides that he
pays the Squire probably $25 for ex-
amining the title and fixing up the
abstract
You tell me that there was some
little cloud on Toms abstract. The
wife of previous owner signed her
name to a deed to the farm different
from the name she had previously
signed to the mortgage on the land,
but the notary had certified to her sig
nature, and the Squire said that while
it was possible a slight cloud, he knew
the woman and knew it was the same
person in both cases-the same wife
of the owner-sO he was able to sat
isfy the title examiner of the Insur-
ahead with the loan, and he promised
to take the case into court afterwards
and quiet the title, for the cloud is
only technical one. The examiner
used his discretion, as he has known
old Squire Brown for years and knows
that he is a reliable lawyer So the
loan was not held up, as was the case
with the cloud ON Sam Sticks title,
who tried to get his loan through the
Federal Land Bank.
Still, that extra per cent. commiss-
ion which Tom had to pay to Squire
would all be saved if you could do bus
mess through the Cooperative Rural
System, and it is to bad that the sys-
TEN is so limited as to make it i'm
practicable.
You say Tom borrowed $4,000; then
to $500, and that is quite an item for
a hard working farmer like Tom. 1t
would pay all the expense of sending
Tom, Jr., to the Agricultural College
for three years. If some percentage
& per cent? were applied to the
S4,000,O00,00O total of the farm mort
cages it would amount to $80,000,000
a year, which is equal to the entire
wheat crop of your State.
Besides, it is under 5 years term,
and if he wants an extension on his
mortgage he will have to continue to
pay that 2 per cent. year and prob
ably bonus also, for it is harder to
get an extension than it is to get an
original mortgage. | met a friend re-
Gently who had been in the mortgages,
Gently who had been in the mortgage,
business in Kansas, where he said the
charge on farms was 10 per cent. in
terest and II per cent. commission,
and sometimes a cash bonus besides
Of course, you know that one of the
objects of an. efficient Rural Credits
Law is to wipe out commissions and
bonuses and make long term mort
cages, running, if you like, all your
life, with the privilege of amortizing
loans
There is a lot of good in the law;
it could not be otherwise, because, you
know, about SO per cent. of this law
is the direct result of Republican
action, it all comes out of the Farm
Life Commission, appointed by Presi-
dent Roosevelt in 1908. That COM
mission had as it's only purpose to
ascertain farm conditions all over the
1t held hearings and had
farmers tell about their difficulties
and then it made report, in which it
called attention to the Importance of