SECURITY FOR OUTLAY 241 



namely, that of power given to the association to turn out a peccant 

 member ; for it is expressly laid down that so long as he is a 

 borrower, a man must of necessity remain a member. 



The object of the Farm Loan Act avowedly is to help agriculture 

 in whatever way it can. Hence the supplementary services added 

 to its prescribed main work — organising associations, educating 

 farmers, persuading them to keep more cows, teaching them better 

 methods of husbandry, causing them to terrace sloping lands, 

 straightening out their " titles," so as to make them marketable, 

 and so on. Under such heads, officers of Farm Loan Banks appear 

 to have been doing not a little good work ; but that is not exactly 

 the province of a mortgage credit institution. 



One may be thankful to the Government of the United States for 

 unmistakably favouring the " co-operative " application of the 

 powers conferred. United States agriculture and rural life, no 

 doubt, stand in declared need of co-operative action, which seems 

 as yet only little understood among those whom they would benefit. 

 And obviously it is a well-conceived policy to attract American rural 

 folk to co-operation by means of what is to them at present the 

 most alluring bait, that is, cheap and readily obtainable mortgage 

 credit. The actual condition of the mortgage market is described 

 by an official Commission as lamentable ; and at a recent congress 

 one American farmer declared that more farmers' wives had died 

 " of mortgage " than of any other complaint. Interest is charged, 

 so the Commission reports, at anything between 5 per cent, per 

 annum and 5 per cent, per mensem ; and commission charges are 

 added, rising to 3 per cent., deducted in advance, which means — 

 since mortgages are granted as a rule only for from three to five 

 years — in the case of a five years' loan a deduction on payment of 

 15 per cent. 



The need of cheap, more readily accessible, and in every way 

 more convenient, mortgage credit is therefore indubitable. How- 

 ever, American Farm Loan Bank credit now granted is rather what 

 we have come to understand by the name of " Land Improvement 

 Credit " — which has not an over-brilliant record among us— than 

 as bond fide mortgage credit. "Purchase of land" in, indeed, 

 included in the list of objects for which money may be advanced. 

 However, by 1919 the proportion of such borrowing h;ul risen to 

 only 16 per cent, of the entire sum lent out. " Replacing existing 

 mortgages," so it is true — being another allowable "purpose" 

 named — may be considered as coming near the same purpose. In 

 view of the prevailing situation, as described above, one would be 



R.K. 



