RURAL CREDITS 715 



"Mr. Henry M. McDonald, president of the Traders' Bank, Pierre, 

 South Dakota, estimates that the volume of western-mortgage 

 business, confined chiefly to Kansas, Nebraska, Minnesota, and 

 Dakota, has reached the sum of $150,000,000 yearly. It may exceed 

 his figures. That it is of great magnitude is evident from the fact 

 that in all eastern cities (and in most of the towns and villages) are 

 located numbers of agents who make a living from the commissions 

 paid them for securing loans. Boston numbers more than fifty 

 agencies of farm-mortgage companies! It is computed that Phila- 

 delphia alone negotiates yearly more than $15,000,000 on western 

 loans. Kansas and Nebraska have 134 incorporated mortgage com- 

 panies. The companies organized under the laws of other states, but 

 operating in these two states, increase the number at least 200. In 

 this reckoning no account is taken of firms and individuals, although 

 a large amount of money is directly invested by lenders of this class." 

 One feature of importance to be observed in this mortgage business, 

 is the fact that the chief part of the power to put in bonds the lands 

 of America comes not from the country, but from the city; while the 

 country is gaining no equivalent power over city interests of any kind. 



As to the oppressive nature of the western farm mortgages the 

 Chicago Times says: "The syndicates that loan money at from i to 

 3 per cent per month are mainly made up of Scotch, English, and New 

 England capitalists, who have their agents throughout the South and 

 West. These mortgages are falling due, and soon an immense number 

 of southern and western farms will be in the hands of foreign mort- 

 gagors. The territories are covered with mortgages on new farms not 

 yet patented. In many districts half the settlers borrow money at 

 high interest to pay the small price required by the government in 

 proving up. This is leading to widespread disaster. The object of 

 the pre-emption law is perverted. Eastern and foreign capitalists get 

 the land with such improvements as the settler has put upon it. The 

 settler loses all by reason of the exorbitant interest he is compelled 

 to pay." 



There are those who would fain establish the idea that these grow- 

 ing financial embarrassments upon the farms of America are "an 

 evidence of thrift rather than the contrary." Borrowed capital has, 

 no doubt, enabled many western farmers to push their enterprises 

 with a success which they, probably, would not have obtained without 

 it. But the payment of the interest on western farms, with wheat at 

 80 cents per bushel, is quite a different matter, as compared with the 



