■r^eS IOWA DEPARTMENT OJP AGRICULTURE 



turned over to him in tlie annual dividends of the bank. So that his 

 credit, resting upon his industry and ability, and the fundamental 

 security of his land, is to go with the credit of millions of other farmers 

 who are in a like situation, and that mobilized credit is taken down 

 to the money markets of the country, and is offered as the best security 

 that there is in the world, the security of the productive earth, to secure 

 the lowest interest rate that possibly can be secured upon money. That 

 is no idle dream; it is no theory; it is working. Let me tell you how. 



The land bank at Omaha was cnartered on the 8th day of March, 

 1917. It was organized on the 27th day of February. It opened its 

 doors on the 1st day of March. tWe were immediately flooded with a 

 volume of business reaching nearly $10,000,000, from the distressed 

 farmers out in the western part of the district — western Nebraska and 

 Wyoming and South Dakota. This was in what the loan companies call 

 the "outlaw'" territory, where, if they loaned any money at all, they 

 :ould get anywhere from 10 per cent a year to 10 per cent a minute. 

 A condition like that was revealed in a letter from Rapid City, S. D., 

 that I got the other day, where a banking Ijjistitution, supposed to be 

 reputable, but whose officers ought to te in the penitentiary for life for 

 highway robbery, wrote a letter offering to loan $1,000 on a quarter of 

 land at 10 per cent interest and 12^4 per cent commission. We haven't 

 any banks like that in Iowa now, but you did have them when I first 

 came to Iowa, along in the seventies. There seems to be a kind of an 

 unwritten law that the wolves move westward as civilization develops. 

 Of course a thing like that couldn't happen in the Hawkeye sca'e, but 

 I will tell you what a Minneapolis concern did just a little While ago. 



Out in Wyoming there is a rancher who has a section of land. I 

 suppose it is worth about $4,000. It is out in the dry-land country, but 

 it will grow wheat and pasture live stock, and he is doing pretty well. 

 He has 680 head of cattle and a dozen horses, plenty of implements, 

 and he is making a good living. The 26th of last February he borrowed 

 $1,000 on that ranch from this Minneapolis loan concern, for five years, 

 at 10 per cent interest. He gave a second mortgage for $244 commis- 

 sion in order to get the loan. Had he gone on thru with that contract, 

 at the end of five years, if he had not been able to pay off that com- 

 mission mortgage of $244, he would have renewed it and paid another 

 commission of about the same amount, and added them all to the face 

 of the mortgage, and been worse off than he was before. 



He discovered after three or four months that it might be possible 

 for him to borrow $1,000 from the Federal Land Bank of Omaha, at 5 

 per cent, on thirty-six years' time, with which to take up that mort- 

 gage. He joined with some of his neighbors in forming a farm loan 

 association, and made his application to us for a loan of $1,000 upon 

 this property. We sent out an appraiser, examined the title, found 

 that it was perfectly good security (our opinion was confirmed by the 

 fact that this very conservative Minneapolis concern had recently loaned 

 $1,000 on the same property), and we sent the man notice that his loan 

 was approved. 



