124 THE LURE OF THE LAND 



who expects to pay a large part of the purchase price 

 from the proceeds of the farm, it is necessary that many 

 years elapse before the whole of the purchase price can 

 be realized from the products of the farm. Here is the 

 ideal place for a long-time note at low interest. Such 

 notes may run five or even ten years, if they do not 

 represent too large a portion of the purchase price. 

 A system of credits of this kind can also be properly 

 coupled with a sinking fund, namely, that the farmer 

 not only pays the interest annually or semi-annually, 

 but also a small portion of the principal, thus gradually 

 reducing his indebtedness and the amount of interest 

 he has to pay. 



POSSIBLE RATE OF INTEREST. 



With a somewhat long experience in farm life, I am 

 fully convinced that there are very few farms in this 

 country so well conducted that they could successfully 

 pay a rate of interest above 6 per cent., and with the 

 very best farms for security that rate ought to be cut 

 down to 5 or 4^ per cent, for long-time notes secured 

 by mortgage on the land itself. Naturally a bank that 

 had a lot of long-time paper would have to be most con- 

 servatively conducted. Its deposits subject to check 

 would have to be strictly controlled, so that it would be 

 possible at all times to secure the money for the pay- 

 ment of individual checks. Greater stability is secured 

 in these cases by the depositor placing his money in the 

 bank subject to order at a future date. In other words, 

 a certain percentage of the farmer's deposits might be 

 subject to immediate check, but any large portion of 

 them should be subject to check only on notice of one, 

 three or five months. Thus all danger of having a run 

 upon the bank would be avoided and the officials would 



