Missouri Country Life Conference. 217 



cular exchange at a discount when direct exchange might cost 

 you a premium. So we are trying to handle this thing in an 

 indirect way. If I have money to lend I can go to the bank and 

 tell them I want to lend the money, and they say "All right, I 

 will pay you three per cent." They say they have to do that 

 to keep the money from leaving the community. We are going 

 to try to prevent the money leaving the community and prevent 

 the bank from paying interest on time deposits. The bank 

 takes my money and they loan it to somebody else. If they 

 make five per cent they must loan it at eight, must they not? 

 Suppose now that they could lend that money of mine at six per 

 cent. In other words, they will say to me, "I am not paying 

 interest on time deposit, but I have some mortgages here, mort- 

 gages on cows, and they are good collateral; I will guarantee 

 them; I will stamp my guarantee on the back of that paper and 

 sell you that mortgage; I will discount it two per cent; you can 

 have four per cent out of it and I will get tw^o per cent." The 

 banker then loans the money, and the borrower puts it again 

 into the channels of trade. He does, not put it down into his 

 boot nor hide it under the bed. He uses it among the mer- 

 chants and among the farmers, and when four o'clock comes it 

 has found the way over to the bank. The banker got it with- 

 out paying interest on it. Every cent that he pays that man on 

 a time deposit he must charge you as a borrower. It is the only 

 way. Now in making the loan, or selling the mortgage, he makes 

 two per cent there, and he saves three per cent instead of paying 

 the interest on the money; he has five per cent margin that he 

 makes on the proposition, and the margin is all that can interest 

 the banker. 



Now^ then, where. are these mortgages going to land? Who 

 is going to get them? Why we must work out the problem in 

 this country whereby the beginner can begin. With the high 

 price of land today the beginner cannot begin. He has not 

 enough money to pay for all his farm, but maybe can make a 

 small payment. The bankers are also recognizing the fact that 

 it takes six to ten times as much to equip a farm for successful 

 operation today as it did forty or fifty years ago when labor 

 was cheap. So the time is here when money on easier terms and 

 longer time must go onto the farms of this country. 



How are we going to manage it. We are going to try to get 

 cheaper money for the farmer from this man who has money to 

 lend on time deposit. That is, we are going to lend it to him at 



