The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-01-24
BY COLIN r. WILLIAMS
Times Special Writer


Times Special Writer
There are two ways TO overcap-
italiZe anything. First, lend too
mucn money on it. If you do that,
you evidently want the pledge. Sec
ond, value it too highly or permit
some one else to do it for you and
the end product is the same; you
will get the pledge even if you
don't want it. Bear these two sys-
tens in mind as they bear heavily
on the present condition of the
American farmer.
1t was not possible to overcap-
italize our farms with the system
adopted by farm lenders in 1914.
They we're placing their own values
on land with an eye to having their
money paid back when it became
due. They. IN the end, paid their
obligations 10 their creditors in
cash, not farming lands.
If you as an individual conduct
ing a lending business with your
own or with other peoples en-
trusted funds see to it that the Dor
rover does not exceed his capacity
10 handle credit, you will inva-
riably have your loaned money paid
back. This was the program of
lending 20 years ago.
The banks, the trust companies,
the recently organized building and
loan associations and the invest
ment trusts. the old and the new
insurance companies all having
within their articles of incorpora-
ton the power to place their cash
out st interest for. the benefit of
millions of depositOrs. held together
on a safe plan of lending with an
eye always TO the ability of the
borrower to repay.
Farmer Given Real Aid
The borrower benefited amazing
" by that plan. It took money and
plenty of it to develop farming land.
While the early years on the Amer
lean farm saw development accom-
plished by works that did not take
much cash, later on when the COM
munities became knitted together
and their drainage problems became
more than farm wide and their
transportation problems became in
terstate in nature, much cash was
needed.
1t is to De noted that the farmer
was not ready to help himself with
his own surplus wealth when this
crisis arrived: however, in spite of
that fact, he always had access to
all the credit he could manage
safely. Others apparently had be-
come better students of his ability
than he. others, and from personal
knowledge, men who had risen from
the ranks o. the farmers themselves
were carefully guiding him through
the business of borrowing money in
the amounts that up to 1914 we're
safe for them to undertake. Witness
the barrenneSS of the foreclosure
records in the United States to as
late as 1925 if you care to prove this
statement. .
Then came the World War. Then
the United States entered it. Then
the slogan was spread across the by
ways of America, Food will win
the war" Then the Federal gov
eminent calling on its farmers
paved the way to add countless
thousands of acres to production.
The blue grass hills were plowed
into to make way for grain and
ever more grain. Then land sky
rocketed in price if not in value.
The ephemeral S2.46 a bushel corn
and s25 per hundred weight hog
marched across the income sheet of
the farmer and he called loudly for
more money.
Boom Days Recalled
Can I forget that period of 1918
TO 1921? [ can see the Indiana
farmer carrying enough clover seed
on his back to pay his Semi-inStal-
ment of taxes. 1 can see a truck
load of corn sell for enough to buy
a Ford car, to pay for two acres OF
land at S225 an acre. 1 can hear
the wide-eyed conversation around
the town squares of a thousand
villages of wealth beyond the Wild
est fancy come true.
Farms were bought and sold and
re-bought and re-sold on ever in
creasing and wholly fictitious valua-
tons. Eighty acres of Tazwen
County 0llO land brought 1850
cash. A section of land in Benton
County. Indiana, was valued at
S2O8,O00, nearly a fourth of a mil
lion. and then sold for that amount.
Dealing in figures like this increased
the farmers insistent demand for
more cash.
Ny recollection of this period
brings out the fact that abou' his
time the American farmer st, Jped
asking for a definite amount OF
money an acre loan on his land.
He had not estimated in the con-
fines of his family circle that exact
" so many dollars would be neeu-
ed to complete his pending trans
action. He went abroad into the
land of farm loans and stopped.
From bank to trust company, from
building and loan company to in