Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1916-03-05

nnncinl responsibility, and he Is not
entitled to any more credit than his
financial basis warrants,
kind Preferred.
Under ordinary conditions, feeder
loans on steers II properly made, with
ample margin ana responsibility, arc
very much preferred by banks buying
cattle paper as an investment, for tho
reason that the security is shaping up
fof market and going into consump-
ton, making the paper self liquidat
ing within q short period Of time. Fur
iher. such loans rs q rule are not sub
/ ieci 10 the same hazards Of disease,
biiz2ards, drouehts. etc. as loans on
range cattle or stocker loans. but.
unless There is ample protection in
/ the margin Of the security, and the
outside responsibility OF the borrow
err feeder loans might be anything
I but desirable ana not nearly so safe
as loans OF the stocker or breeding
+ variety particularly II the latter are
made 10 substantial farmers owning
their own farms and having plenty OF
feed, water. adequate protection and
competent handling.
Prices on stockers, as We all know,
are now extremely high. The follow
ing opinion OF one Of the recognized
authorities in the cattle loan business
is shared by many:
III is evident TO me cattle are being
held at too high prices. This refers
/ particularly 10 COWS and calves. In
my Judgment under the present prices
OF beef the ordinary calf, six to ten
months old. should be sold for deliv-
cry at about the time II is year old
nj from $50 to $25 per head, whereas
the price Is now $50 to SS5 per head
Makes Cow More Valuable.
Notwithstanding this, however, tho
margin Of security Is heavily reinforc-
ed by the natural Increase. If a COW
selling for $50 TO $50 VIII produce n
calf selling at from $25 TO $50, loans
representing very substantial adj
vance on the value Of the cows can be
liquidated out Of the increase on the
average within u period Of not longer
thnn eighteen months, so that If prices
suffer large decline the increase will
make a safe margin in the loan.
stoeker loans on range cattle arc
more subject TO hazards of various
kinds than those on farms, and the
quality usually does not average az
high grade, therefore, unless the mar
gin ana responsibility are very good,
range cattle loans are not preferred.
Cattle loan companies in recent years
have been taking on more and more
loans Of this variety-even those
which formerly confined their loans
to aged steers This has been a great
terial aid to increased production. AS
the natural liquidation of this paper
extends over a much longer period
than the ordinary bank time on which
the loans are sold, il Is rather a moot
ID question how large n proportion OF
paper Of this kind u company can
safely put out with It's endorsement.
II would be very adverse TO the In
forests Of all concerned to force the
sale Of The security before the natural
time Of liquidation, to pay the debt.
Time to Avoid Trouble.
The cattle loan companies take the
view that the market for stockers Is
about as good ana reliable as for any
thing else, and IL the loans are prop
erly made to responsible people, who
can respond by the sale Of the secur-
hy, or otherwise, to make their obli-
cations good, in case Of necessity, they
can liquidate these about as well as
! the steer loans. 1t Is perhaps true
/ Tor the time being, due to some Of the
reasons ] have mentioned, that this
/ how long this will continue. How
! ever, AZ the moment this Is largely a
question of management, bank ar
rangemcnts and character and quail
| IS Of the loan; and the principal test
Of dcslrability on the part of the pur-
chaser is security, and the assurance
/ IL can be liquidated promptly ana
without loss, irrespective of the en-
dorsement OF the selling company.
The old and wise heads in the cattle
business, in the light of the experience
Of the past, are unanimous in dcsir-
ing that cattle loans as Il whole shall
be put on the safest possible basis, to
| insure purchasers from loss, for they
we'll know the great cattle industry
requires and deserves strong financial
backing and they do not want to
ever again see repetition OF tho ev-
periences of fifteen years ago. when
a lot Of companies, through foolish
and injudieious loans. got into trou-
BILE, with widespread losses to pur-
chasers of their paper, and giving the
business a black eye from which II
took long time to recover.
The purchase OF cattle paper in the
large eastern money markets is usual
~ through cattle loan companies OF
banks, who make the loans ard give
their endorsements in connection. II
la not often practicable to make di-
rect loans, as this would involve toe
much loss Of time. expense and trou-
bile in making Investigations to be
practicable or satisfactory. The pur-
chasers naturally prefer some inter
mediary to make the purchases and
look after the security during the life
Of the loan, ana handle il in case OF
trouble.
Time TO be Precedent.
As TO present hieh prices and the
tendency OF the markets in the flu