134 THE LUKE OF THE LAND 



ation by independent sovereignties will of course re- 

 quire a special form of guaranty of land titles to secure 

 the lender of the money from any possible loss. 



It is therefore important, in order to secure these 

 long-term mortgages at the lowest rate of interest, that 

 the various States should undertake some form of guar- 

 anty of the title, so that the borrower may have no doubt 

 whatever respecting the legality of the title on which 

 his money is placed. If it is the purpose of the na- 

 tional and state governments to promote agricultural 

 credits, then it is proper for them to do so in every 

 reasonable way, and the guaranty of the title would re- 

 move one of the objections which so many people have 

 to lending money on real estate. 



It is recognized, by reason of this multiple form of 

 government, that in any system of rural credits which 

 may be proposed by Congress the sovereignty of the 

 State must receive direct recognition, and that in no 

 case would any set of banks in any one State be permit- 

 ted to operate in the lending of money on collateral or 

 other mortgages in other States. There would there- 

 fore be as many separate units of rural credits as there 

 are separate States. In the large States it is also ad- 

 visable that the areas of operation of the rural banks 

 should be still further restricted. In other words, in 

 the large States two or more areas can be fixed by the 

 legislature to which the rural bank system of credits 

 is confined. The more densely populated a community 

 is, and the more restricted its area, the more workable 

 will be the system of long-time rural mortgages. For 

 this reason the area of the State will be the largest 

 possible unit which could be made available for the pro- 

 tection of a general mortgage note. This plan of rural 

 credits promises a lower rate of interest on farm loans. 



