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Show AN EXPENSIVE PROPOSITION FOR THE FARMER Commissions Quite Costly More About the Knurled Rural Credit Law. .Must lie Amended ISy Republicans WHO ACCOMPLISHED PRELIMINARY PRELIM-INARY OF Rl'IlAL CREDITS MOVEMENT Letter No. 4. Cousin Ben to Farmer Ned. .Washington, D. C, Oct. 27, '16. Dear Cousin Ned: I was not surprised at what you wrote me of Tom Ertgely's success in borrowing money from the Life Insurance In-surance Company, through Squire Brown I was not surprised either that Tom got a higher appraisal on his farm than the Federal Land appraiser ap-praiser allowed. You see the "Carpet-bagger" had to play safe; he had no personal interest at stake in making a large loan he is paid a fixed salary. If he allowed too high appraisal he might involve the bank in future loss, and so he would lose his own job, on the charge of incompetency or bribery or something. some-thing. He was undoubtedly instructed instruct-ed by the ofiicers of the Federal Land Bank to be very conservative in his appraisals; they, too, are on salary, and have no interest in making mak-ing profitable loans. They get their appointments through the Farm Loan Board at Washington and their chief concern is to be con-err- ative and get all the security they can pic!: on all loans. On the other hand, Squire Brown is interested in putting over as big a j loan for Tom as possible, for he gets a commission, so he serves Tom as his own appraisal of the farm, knowing know-ing that the loan is safe, because he knows local values and knows Tom's farm, he also, knows that Tom is a good farmer and making a profit, so that the loan is a desirable one and he can be liberal in making it, both for the sake of his own commission and to accommodate his friend Tom Edgely. As a matter of fact, there is not much risk in that, for even if Tom does add $1,000 to the cash value of the farm, the loan is only half of the appraised value, and we all know that the price of land is going up each year, as the country is settled. But who pays Squire Brown's commission? com-mission? Tom gives a lirst mortgage at 6 per cent to the Insurance Company, Com-pany, and a second mortgage at , 2 per cent to the Squire. That second mortgagees the Squire's commission. So Tom pays the commission, and as the loan is going to cost him 6 per cent with a'eommission of 2 per cent a year for five years, it makes a nice little profit of 10 per cent on the loan for the Squire. Besides that he pays the Squire probably $25 for examining ex-amining the title and fixing up the abstract. You tell me that there was some little cloud on Tom's abstract. The wife of the previous owner signed her name to a deed to the farm different dif-ferent from the name she had previously pre-viously signed to the mortgage on the land, but the notary had certified certi-fied to her signature, and the Squire said that while it was possibly a slight cloud, he knew the woman and knew it was the same person in both cases the same wife of the owner sir? he was able to satisfy the title examiner of the Insurance Company Com-pany that it was safe to go ahead with the loan, and he promised to take the case into court afterwards I and quiet the title, for the cloud is only a technical one. The examiner used his discretion, as he has known old Squire Brown for years and knows that he is a reliable lawyer. So the loan was not held up. as was the case with the cloud on Sam Slick's title, who tried to get his loan through the Federal Land Bank. So that extra 2 per cent commission commis-sion which Tom had to pay to Squire Brown amounts to considerable. That would all be saved if you could do business through the' Co-operative Rural System, arid, it ..is too bad that the system is so limited as to make it impracticable. You say. Tom borrowed $3,000; then in five years the commission amounts to $300, and that is quite an item for a hard-working farmer like Tom. It would pay all the ex- pense of sending Tom, Jr., to the Agricultural College for three years. If that same percentage (2 per cent) were applied to the $4,000,000,000 total of the farm mortgages it would amount to ?80.000,000 a year, which is equal to the entire wheat crop of your state. Besides, it is under a five years' term, and if he wants an extension on his mortgage he will have to con-tint'.e con-tint'.e to pay that 2 per cent a year, and probably a bonus also, for it is harder to get an extension than it is to get an original mortgage. I met a friend recently who had been in the mortgage business in Kansas, where he said the charge on farms was 10 per cent interest and 12 per cent commission, and sometimes a cash bonus besides. Of course, you know that one of (he objects of an efficient Rural Credits Cred-its Law is lo wipe out commissions I and bonuses and make long term j mortgages, running, if you like, all j your life, with the privilege of amort- i b.ing loans. I There is a lot of good in the law; I it could not be otherwise, because, you know, about 99 per cent of this law is the direct result of Republican action, it all comes out of the Farm l.Ue Commission, appointed by President Presi-dent Roosevelt in 190S. That ram-mission ram-mission had as its only purpose ,1.0 ascertain farm conditions all over the country. It held hearings and had farmers tell about, their difficulties and then it made a report, in which i ii called attention to the importance j of legislation which would give farmers farm-ers better means of financing their1 farms. Tre-ddem Roosevelt otvpha-: otvpha-: I'.'.e. report with a special mes sage to Coneress. urging that C'en-gress C'en-gress take steps to study the subject. Then President Taft showed, his , lively interest in the matter by send-! send-! ing instructions to nil of our ambassadors am-bassadors ami ministers in Europe ! to make a special study of European methods of 'financing agriculture. Ho j also sent a special commission of . three prominent men to study the ! subject in 1912. and when they re-j re-j ported he sent their reports to every Governor in America, with a personal letter, urging the Governors to give the subject serious study and be prepared pre-pared to discuss it at the next meeting meet-ing of the House of Governors, which was held in December, 1912. About that, time farmers lippnn np-ltnttnir th subject in farm meetings. Leaders of agriculture made speeches upon the subject more or less hazy and in many instances unsound, because the subject was not understood clearly even by economists. It was discussed by the National Grange, then by the ; Farmers' Union and by the Southern Congress a non-political farm .organization .or-ganization of the South. So much were they impressed in the Southern Congress that they appointed an American Am-erican commission of one hundred representative farmers to go to Europe, Eur-ope, at their own expense, to study the subject in company with the of- 1 ficial United States Commission. Prior to that President Taft had : secured from Congress an act ap- ; pointing a United States Commission to go to Europe for the same purpose, as an official body representing the United States Government. So these two commissions went together, and as a result they urged the passage of j a Rural Credits Law, based upon co- ; operation of farmers. I But I want to emphasize to you the i fact that not one step of this prepara- j tory work. is to be credited to the Democrats, it was all doiie during ; the Roosevelt and Taft administrations. administra-tions. President Taft signed the law authorizing the Ignited States Com j mission just before he went out of office. The only thing that can be credited to the Democrats is the j BUNGLING LAW WHICH THEY j HAVE PASSED which you will find j absolutely inoperative, because ' its j makers don't know farmers 'nor farm conditions, and refused to take any j advice from the'Roosevelt Farm Life ' Commission or from the real farmers who investigated the subject in Europe Eur-ope unless they happened to be Democrats. Dem-ocrats. They were so eager to make political capital that they forgot to study real farm conditions. Just as an illustration of the political po-litical poppycock of this Democratic measure, look how its expensive Federal Fed-eral Loan Board started its work. Without even waiting to establish headquarters, the first thing the Board did (with salaries of over $1,000 a week) was to junket up to Maine. What for? They had no power to change the law and no intention in-tention to establish one of the twelve land banks in Maine. All they could .do was to go up there and make a noise like a "hearings," before farmers, farm-ers, for its effect on the political campaign. cam-paign. So Maine turned in a whooping whoop-ing majority against the Democratic senators and representatives. "Remember "Re-member the Maine!" Ned. "Remember "Remem-ber the Maine! " The co-operative part, of the system is loaded with the local. National Loan Association of ten or more neighbor farmers, who won't work together, because they do not want to consult each other about their intimate in-timate affairs. The Democrats have also in the same law set up a rival system, which assures the failure of the co-operative system. It would have been almost impossible to establish es-tablish the co-operative system any-howj any-howj along the plan proposed, but to place this extra obstacle ill the form of a joint stock bank a profit-making profit-making concern, to be, owned by its investors and not by farmers is ;simply murdering, their own child. The complicated plan (their child) would probably have died anyhow, choked as it is, but one would expect its parents to have done all they could to have saved it from death, instead of taking such a club and beating out its brains as the Joint Stock Profit-Taking Bank is bound to do with the struggling co-operatives. The characteristic difference between be-tween Republicans and Democrats is that Republicans protect their, infant in-fant industries; the Democrats give theirs infantile paralysis. Your cousin, Ben. (To be continued. ) |
