The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1922-11-03
MANKATO FREE PRESS
FARMERS ASK FOR ADOPTION
AMENDMENT NO. l; REASONS
Theodore Christianson Presents Them; the
Federal Land Bank Failure To Meet
Requirements

I FARMERS or Minnesota are asking
adoption of Amendment No. /,
which paves the way for the estab-
lishment' of state long time farm
loan system, according to Theodore
Christensen of Dawson for these
two outstnGing reasons.
First.-Rapid growth during
| recent years or tax exempt securi-
ties, threatens TO prevent far
! more from being even as well
1 financed in the future as in the
past, unless adequate govern
mental machinery is set up.
Second.-Failure of the Fed
eral Land banks to meet the de-
mand for long time loans and
the foreign and un American
plan upon which they are. or
ganized.'
Mr.. Christensen was chairman of
the house finance committee in the
1922 Legislature and fathered the bill
under which the amendment was
submitted. He has made an extern
sive study of the farm mortgage sit
uation and the effect of past practic-
1 es on Minnesota agriculture.
Amendment No. ! the rural cred
its amendment, says Mr.. Christian
son in a statement made public to-
day. lis unique in that it is the one
definite proposal. of the many pro-
posals made for meeting the present
industrial and financial Sitution, that
has the Endorsement of every polit-
icai party and the support of every
industrial group. The republican.
democrtic and farmer labor parties
have all declared for it: the Farm
Bureau Federation and the Non
partisan league, differing as they do
in both principle and practice, are
supporting 1t. Bankers and mer-
chants. as we'll as farmers. are adj
Vocating it, for they realize that ag-
fore there can be security for the
banker or probable business for the
merchant.
The Loan Agents Object l-
| There are a few loan agents who
object to the rural credits amend.
ment, for the obvious reason that
when the activities of the Federal
Land banks are supplemented by
the operation of state rural credits
systems, there will be very little
chance for loan agents to function;
very little opportunity to levy toll
of from one half of one per cent to
three per cent on the mortgage in
debtedness Of the farmers of the
Northwest
81 say there are few of the loan
agents who object to the rural cred
its amendment; most of them, es
pecially bankers who do a land loan
business, do not object; for their
commissions have been trimmed
and whitfield down by the fellows
higher UP, who now get the real
profits of the farm loan business, to
such an extent that there isn't much
profit left for the man who really
! places the loan. The average banker
is more anxious to improve the
prosperity of his community and
thereby help his legitimate banking
business than he is to hold on the
derives from the farm loan bust
mess.
There Is no substantial reason
why anybody should be permitted to
levy a toll on the farm mortgage in
debtedness of the country. The man
who argues that a state farm loan
system is socialistic because it in
| terferes with private profits, misses
the point that legitimate private
profit is measured and limited by the
value of service rendered. There
is no such measure in the private
land loan business for nobody would
argue that the services rendered in
placing of loan. in bringing bor-
rowers to a lender. are of such val
ue as to entitle the ,aRent to an unus
one tenth to one half of the interest
which the lender receives.
Banker Entitled to Margin
THE legitimate banker is entitled
to liberal margin, for he must pay
interest on funds he is compelled to
hold in reserve; he must suffer the
losses of bad loans; but the mere
broker, who handles other peoples
money, who maintains no reserves
and is responsible for no losses, is
entitled only to such. a profit as
would compensate him fairly for
the work he does and the expense
he incTrs.
"a system which permits the levy
| ing of a/toll on the farm mortgage
indebtedness of the country by men
who act only in the capacity of ne,
gotiators, is as inequitble as the
system under which, in ancient tim
es, the collection of taxes was farm
ed out to preferred individuals,
who retained as recomppense for
their services a portion of what they
collected, and in time It will be so
considered. la
THE rapid growth of tax exempt
securities is making it increasingly
necessary that the state take over
the farm loan business. These Sc
curities are proving attrctive to in
vestors, not only because they are
tax exempt but because they are Sc
cured by the taxing power of the
state; because it is<never necessary
Ito forclose mortgages in order to
collect interest or principal; be-
cause the interest is paid regularly
and promptly, and the principal is