228 THE BUSINESS OF FAEMING 



lands were thrown upon the market by the govern- 

 ment. This fund was loaned in Indiana to 

 farmers upon farm real estate, the loans being 

 made up to one-half the appraised value of the 

 land, and were made for five years' time at six 

 per cent, interest, and thereafter could be con- 

 tinued for as long a period as desired by the bor- 

 rower. 



The majority of these loans ran for years and 

 it is questionable whether they were a good thing 

 for the farmer. The farmer knew they did not 

 have to be paid when due ; that they could be con- 

 tinued as long as the interest was paid. At one 

 time the author was employed by a county to look 

 up these loans, and where they were delinquent, 

 to see that they were either paid or renewed. He 

 found that in many cases they were made upon 

 lands not valuable which had been over appraised 

 and owned by thriftless farmers, so a large num- 

 ber of these loans had gone for over twenty years 

 without anything being paid upon the principal. 



A long time loan made upon land well up to its 

 real value should have a required yearly payment 

 clause, at least after three years, as this will pro- 

 mote economy and thrift. Of course time should 

 be given the borrower to become established upon 

 his land, but as long as he knows he can carry the 

 loan for a long series of years without being re- 

 quired to make any payment upon the..principal, 

 he will not likely make any effort to adjust his 

 affairs and expenditures so as to meet payments. 



So the best method of safeguarding a system of 

 farm credits is to get into it the element of fear, 

 fear of loss and foreclosure. Let the borrower 



