AGRICULl^RAL CREDIT IN THE UNITED STATES 947 



purchase. It is to be borne in mind, also, that a farmer who 

 would have to resort to mortgaging^ for improvements or equip- 

 ment would already have a mortgage on his farm and could 

 therefore not offer acceptable security to a national bank. 



The conclusion is inevitable that the newly authorized loans 

 cannot become important. This is overwhelmingly borne out 

 by the experience of our state banks and by that of European 

 banks. It is interesting to note in thi^ connection that the 

 Scotch banks, which have been wonderfully successful in meet- 

 ing the demands of agriculture, do not, if they can avoid it, 

 accept real estate as security. One cannot but suspect that a 

 great deal of the clamor for the law permitting national banks 

 to make mortgage loans has been raised by men ignorant of 

 banking principles, eager to propitiate those who regard the 

 national banks as oppressors, or by bankers who have permitted 

 their judgment to become warped. 



State banks are not restrained by law from making mortgage 

 loans, and such loans, while not large for the individual bank, in 

 the aggregate have reached a very large sum. The Comptroller's 

 report for 1914 gives this amount as $258,398,352.95, Indi- 

 rectly, by acting as agents of outside investors, both national and 

 state banks have made enormous sums of capital available to 

 farmers. Unlike these banks, trust companies and savings banks 

 have in tmst funds which may safely be loaned on mortgage. 

 But while the trust company has performed a very important 

 service in the matter of making agricultural loans, savings banks, , 

 which are largely confined to our industrial centers, have found 

 urban loaning more profitable. 



(4) Some states loan to farmers from the permanent school 

 fund. Up to the present time this has but slightly influenced 

 the farm-mortgage situation, but recent agitation favors a greater 

 liberality in this practice. Authorities have rightly felt, however, 

 that these funds should not be loaned without adequate security, 

 and farmers who can offer such security would have no trouble 

 in obtaining loans elsewhere. 



(5) During the last quarter of the nineteenth century numei- 

 ous mortgage companies were organized which obtained their 



