56 THE FOOD CRISIS AND AMERICANISM 



ness prudence that justifies the guaranteeing of a farm 

 mortgage. The investors who relied on it almost in- 

 variably lost; those who did not, seldom lost. 



The Rural Credit System, so far as I am able to ob- 

 serve, has not increased the supply of food stuffs in 

 the slightest degree. It will, however, if carried to 

 its proposed objective, place an absolutely unnecessary 

 fixed charge of $40,000,000 to be paid every year by 

 the farmer borrowers as long as their mortgages run; 

 and at the same time place $4,000,000,000 of presum- 

 ably untaxable securities in the hands of profiteers, 

 who should be paying taxes and buying Liberty Bonds. 

 Appai ently, in many localities, a very considerable pro- 

 portion of these loans are made to take up and increase 

 loans already resting upon the farms. The surplus is 

 chiefly devoted to either absorb the accumulated short- 

 age in farm operation, or for speculation. On the 

 other hand, it has materially increased farm land spec- 

 ulation, has added a new impetus to the already over- 

 stimulated land boom, which will ultimately prove 

 more disastrous than any previous one, for the reason 

 that the worst effect of every boom is that it engen- 

 ders a distaste for legitimate business, more disas- 

 trous, not only because it includes a vastly larger class 

 than was included in previous booms, but because it 

 affects our basic and creative industry. Whenever 

 farmers are either unable or unwilling to buy goods, 

 all activities between the farm and the factory are 

 checked, if not completely arrested, and depression, if 

 not panic, follows. 



It was the evident intent and purpose of the Law 

 creating Federal Land Banks, that credit to be ex- 



