754 AGRICULTURAL ECONOMICS 



high state of cultivation is about as salable a proposition as can be 

 found and the hazard of loss to both the owner and lender is reduced 

 to a minimum. 



Farm mortgage bankers are concerned principally in long term 

 mortgage credit. They have had years of experience ranging from 

 ten to fifty years in granting this kind of credit. There have been 

 failures in this line of business just as in all other business ventures, 

 but I think I am safe in saying that less money has been actually lost 

 by farm mortgage bankers for their clients than through any other 

 line of investment securities, excepting possibly municipal bonds sup- 

 ported by the taxing power of our various branches of government. 

 None of the farm mortgage bankers has grown excessively rich out 

 of this business. It has been profitable, but not excessively so. 



One of the features most prominently mentioned in proposed legis- 

 lation is the predicating of mortgage loans as security for debentures 

 issued in convenient form and maturity to attract the small investor. 

 Most of the well meaning enthusiasts glibly say that these bonds will 

 find a ready market and that all that is needed is to have a sort of 

 government paternalism cast over these bonds to make them eagerly 

 sought after by the public. 



The experience of several companies doing this business has 

 brought to light enough troubles and handicaps to cause me to say 

 that this kind of financing should be handled with extreme caution 

 and that the supervisory control of the government should be worked 

 to its highest efficiency before launching this craft out upon the invest- 

 ment sea. Contrary to past experience, mortgages of the most 

 superior merit regarding security and moral hazard should be the 

 ones that should be trusteed for bond issues, rather than to counte- 

 nance the practice of placing in the debenture trust such mortgages 

 as do not in themselves possess sufficient attractiveness to find a ready 

 market. 



Knowing the business of farm mortgage banking thoroughly, both 

 as to its strength and weakness and as to the desirability of 

 handling and selling both mortgages and bonds the farm mortgage 

 bankers of the United States in convention assembled at St. Louis 

 in October, 1915, after having months of study and serious considera- 

 tion regarding proposed legislation by the coming Congress, adopted 

 the following resolutions: 



This Association was formed and exists to further any action which 

 will facilitate rural credits, whether by legislation or individual or organized 



