RURAL CREDITS 723 



or the farmer's notes and in case of need discounts them, sometimes 

 at the farmer's own bank but more often at some metropolitan bank. 



In factor's credit the loan is made, not in supplies but in cash, 

 though the purpose for which it is to be used is rigidly prescribed. 

 In the South the cotton factor advances the farmer the money for 

 financing his crop, and the farmer contracts to plant a certain number 

 of acres of a certain crop, cotton for example, and to sell his crop to 

 the factor. In the North a livestock commission firm advances 

 money to the farmer for the purchase of livestock, which he con- 

 tracts to sell through the firm. 



The extent to which bank credit is used by American farmers 

 varies widely according to the economic development of the com- 

 munity. Where agricultural methods are well established and 

 climatic conditions are such as to preclude the probability of crop 

 failure the farmer enjoys practically the same credit advantages as 

 the merchant. Farms are comparatively large and therefore the 

 loans are of sufficient size to make it worth while for the banks to 

 grant the accommodation, and our system of free banking has 

 permitted the establishment of banks wherever they could be made 

 to pay. 



B. Farm Credit Institutions of the United States 



234. MORTGAGE BROKER AND MORTGAGE COMPANY 1 

 BY JAMES WILLIS GLEED 



The western mortgage business was begun by individual brokers, 

 who invested on their own judgment, based on personal knowledge 

 of borrowers and securities. Their profit lay in the majgin between 

 the low interest capitalists would accept and the high interest bor- 

 rowers would pay. Capitalists sent their money for investment, and 

 mortgages were made to them directly, so that the brokers required 

 no capital. The business of bringing borrower and lender together 

 has always been profitable. The broker of the community becomes 

 the capitalist of the community. The western mortgage brokers have 

 been no exception to the rule. One of them in Kansas has made nearly 

 $10,000,000 since 1870. The business developed rapidly. As increased 

 capital has become necessary, individual brokers have given way to 

 corporations. There are probably two hundred such corporations 



' Adapted from the Forum, IX (March, 1890), 94-105. 



