The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-01-22
BY COLEN F. WILLIAMS
Times Special Writer

BY COLEN F. WILLIAMS
Times Special Writer
We may, in summarizing the |
farming period up to the year 1914, |
state that in these United States |
the surplus production of the farms
above and beyond the needs of the
farmers was converted into Other /
forms of wealth held mainly by
other classes than the producer of
the original wealth.
The original producer, the farmer
himself, was not interested in or did
not have the education required to
hold the control of that wealth and
having lost control of it, when he
felt the need for it, found himself
going out into a business world of
money to borrow it back at interest.
That is probably exactly as it
should be, if we are to accept civil
ization in all of its phases as some
thing ordained and immutable.
While we could have lived in this
country exclusively a nation of
farmers and no doubt happily, the
development of all this clutter OF
civilized rubbish about us has
possibly given a degree of salts
faction to some of us who have
right to life, liberty and the pursuit
of happiness under the Constitution.
And it took another classification of
persons to develop these things as 1
have Just pointed out.
Mortgage Once Stunned
The business of borrowing money
on farming land prior to the last
twenty years was something the ma
jority of farmers did not do. The
word mortgage was akin to evil.
The minor loans of community
were advanced back and forth be-
tween the farmers themselves; the
major loans we're the subject of de-
tailed study on the part of the
family about to undertake one.
At first, money was expensive,
There was vastly more land than
coin of the realm. Because of this
security surplusage, those who had
money hesitated to place it on land
except in small amounts an acre,
and those who had land to pledge
for money found it rather easy to
move westward to a new field If
the lender advanced him too much
money. This was called selling the
farm with a loan.
There was no law universally APP
piled to fix interest rates, and even
as late as the COS, it was unusual to
find interest rates of 10 per cent
paid in many of the best surplus
producing farming communities.
Took Step Knowingly
So, I say the American farmer
borrower went into the business of
mortgaging his lands with his eyes
wide open and ready for the worst.
Many theme for thrilling novel
was laid about the problems Of a
mortgaged family in the Victorian
period.
Capital investment in production,
however, on the whole, did not take
a very large proportion of the sur
plus earnings of the farm prior to
1910-1914. Wealth in this country
had been increasing rapidly; so had
production; so had population. The
upward sweep of the curve denoting
the advance of these three things
had become precipitous about this
time
The price of farming land had in
creased along with other things, |
chiefly with the population increase
and it was becoming more important
to a young farmer just entering
the business to be able to find some
one with quick and ready cash to
finance his buying operation.
There we're number of reliable |
sources to which he could go 20 |
years ago. Most of the old-line in
companies had developed !
within then offices to
study the business of making loans
on farming land. BY 1914 they had |
with the thoroughness characteristic
Of investment houses charged with
the safety and custody of funds out
lined safe process by which
money could be borrowed and paid
back. I want to emphasize the last
two words, paid back 1t is one
thing to lend or to borrow money;
it is vastly a separate thing to pay
it or get it back.
Long Term Loans Used
Looking forward to the due date,
these insurance companies who were
with the funds Of count
less thousands of American human
beings who were making an effort
TO accumulate something in the way
Of cash against the time of their
death or old age, developed systems
that provided the borrower with
methods by which he could repay
his loan in a period not to exceed
Is years.
The first method was not to lend
him too much money, more than
he could reasonably be expected to
repay with the income from his
farming land.
The average price Of his commodi-
ties was figured over base Of years,
the average sale price Of his land
was estimated, the average of ev-
erything was estimated, even to the
extent of crediting that particular
farm offered as a pledge for loan
with the average type farmer, no
more wasteful and no more thrifty
han the average, which was no
low in the scale of the
worlds farmers.
The dollar an acre loan value of
most of the farming land in this
country was low. In the Neither
ands and in Westphalia and in GER
e i !