The Devils Lake world and inter-ocean. (Devils Lake, N.D.) 1915-1920, 1916-10-26
LETTER NUMBER FOUR
COUSIN BEN TO FARMER NED

Dear Ned:-
L have just come from the Office Of
the Farm Loan Board. My old friend
w. w. Flanagan is Secretary of the
Farm Loan Board. He is a Democrat.
He is an experienced banker, and was
at n time President of the Southern
Bank of New York City. He is a
recognized authority on financial
economics. He was telling me today
that he had pust been offered the
Presidency of a $5,0 900 bank, to be
organized under the joint stock plan
of this new Democratic law. He said
they offered him a higher salary than
what he was getting as the secretary
of the Farm Loan Board, but that he
had refused to consider it. In the first
place, he regretted that the law u
thorized joint stock banks at all, for
their, existance and their offering in
the financial market their own bonds,
based upon farm mortgages, in COM
petition with the bonds which the Fed.
eral Land Banks will offer, based up
on cooperation mortgages, will make
rival bonds. of the same kind. MI.
Flannagan's judgment is that they
will force the rate of interest on both
kinds of bonds up about one per cent.
Now, as there is in existance about
81 100000 of farm mortgages,
that n per cent extra on the bonds
will cost the farm borrowers an extra
$4O,OO0,000 a year. The rate of inter
est on the mortgage will always be
regulated by the rate of interest on
the bonds, yet there are some who
think that the Democrats were very
ingenious to put this rival system, ev-
en- if it does cost the farmers $40,-
100000 extra. "What is $40,OO0,OO0
anyhow" to a Democratic administers.
ton, which in n single session Of
Congress appropriated more than a
billion dollars in excess of it's W es-
innate of receipts?
Well, l started to tell you about Mr..
Flanagan and the offer Of the Pres
idency of the $5,0o0,000 bank which
he refused. He said he asked the
parties if they had their S., 1000, 900 all
subscribed yet. They answered that
they were organizing a force Of sales
men 70 sell the stock of the bank to
Farmers at 5000 a share, although it's
par value is 500. They said they
were going to sell it to farmers, who
are not familiar with stock, at 5000
by explaining that after paying the
trifing cost Of organizing the bank,
the extra 500 a share will form a sur
plus and make q strong bank. Con-
idently, they told Mr.. Flanagan that
the promoters were going to take $50
a share for their own profit on selling
the stock. So, for organizing this one
bank the promoters expect to fleece
the farmers out of $1,250,000 and that
is only the beginning.
They willthave a. great army of
stock statesmen to solicit subscriptions
from farmers all over the United
States, and the farmer who wants to
borrow from the Joint Stock Bank will
be obliged to invest at least S per cent
Of his loan in the bank stock at double
it's par value. Banks are not allowed
to charge commission, but what is to
prevent them from selling the unsus-
pecting a parcel Of watered stock, be.
fore they will consent to make a loan :.
Now I think you understand a little
about the new remedy which the Dem.
ocratic Party is offering the farmers
I will be very glad to answer any
questions on the subject, for yourself
or your neighbors. Write me, ane
you will 500 hear from me.
Don't you agree with me, Ned, thai
this law, in it's present shape is moth
ing but a "gold brick" and that if tn,
farmers ever do geat a real rura
credits law, they will get it through
the party which gave them the frs
Farm Life Commission to investigat,
farm conditions, the party which frs
investigated the subject of rura
credits through the ambassadors t,
Europe the party which first push
ed through Congress a law to sen,
a commission to Europe to Investigate
rural credits? Why, Ned, the part!
that has done everything for farmer,
which established the U. S. Agri
cultural Department, which enacted
the Homestead Laws, which enacted
the Irrigation Laws, which established
! Agricultural Colleges, which protects