FOURTEENTH ANNUAL YEAR BOOK— PART VI. 509 



done at the present time, but they fail to s(>ll their l)on(ls or de- 

 bentures at a low rate of interest for the reason that you would 

 not bu}^ them. You don't know whether the securities are on Iowa, 

 Dakota or Nebraska land. 



Mr. Wallace : You are out near Creston. "What modification of 

 Mr. Harsh 's bank would be necessary? 



Mr. Hogan : Mr. Harsh 's bank is a private institution ; it is not 

 incorporated. Wlien he makes farm loans, instead of making the 

 amounts all in one note he makes them in separate notes, so that 

 he can sell them to individuals and in the quantities they want. 

 That is all there is to this Harsh system. He doesn't even observe 

 any of the principles of the landschaft. It isn't any improvement 

 over the present method except that he makes his notes in amounts 

 to suit the borrower. He makes the mortgage to the Land Credit 

 Bank as trustee, which is J. B. Harsh, and there isn't any special 

 security, except that you can look the mortgage up on the record. 



Q. Does he guarantee it? 



A. Yes, his guarantee is back of it. 



Q. AVhat interest does he get? 



A. He gets as big a rate of interest as the ordinary loan asso- 

 ciations, or larger. 



Q. How much more do you have to pay the insurance com- 

 panies than the man who borrows from the Credit Foncier ? 



Mr. Hogan: The lowest rate is 514 per cent. Of course we 

 have for a number of years borrowed as low as 5 per cent, but with 

 commission above that. I understand this commission is paid every 

 year for five years : it is part of the cost of the money. My opinion 

 is that the farmers of loAva, as good security as they are, ought to 

 borrow money at as cheap a rate of interest as the best railroad 

 securities. 



Mr. Doran : About a year ago I was one of the appraisers on 

 a farm loan. The owner was borroM'ing the money of an insur- 

 ance company at 5i/^ per cent; I think he had to pay something 

 additional. We certified that the farm was worth .^34,000, and he 

 wanted to borrow .$12,000. The insurance company turned that 

 loan down. Within ten days it loaned $6,000,000 to a bank in 

 Chicago at 4.45 per cent interest. I think this will answer Henry 

 Wallace's question. The convenience of makiug a loan counts for a 

 good deal. I asked the attorney why they did that. He said: "It is 

 an expense to look up the title and look after the interest, and it is a 

 good deal better to loan a large amount to the Continental & Com- 



