l8o AGRICULTURAL ECONOMICS 



of the farmers and illustrates what is often needed in order to 

 make farmers desirable bank patrons. The group of farmers 

 organized into an association may be looked upon as a banking 

 auxiliary or as a farmers' borrowing organization. There is 

 work for both the farmer and the banker in developing a better 

 credit system. 



The trust company deals in a class of long-time loans of which 

 the farm mortgage is the typical example as far as they have 

 to do with farming interests. Banks are much less attracted 

 by farm mortgages. Banks and trust companies are probably 

 of much less importance in the making of loans to farmers for 

 the purpose of buying land than are the well-to-do farmers 

 and the retired farmers of a prosperous neighborhood. These 

 men know land values and know the borrowers both with re- 

 spect to their character and their abilities as farmers. For this 

 reason they are in a strong position to make loans with safety 

 and at no expense for investigations, whereas the bank or trust 

 company would find it necessary to be at considerable expense 

 in ascertaining the merits of each particular case. 



Many of these country money lenders are fine citizens and 

 leaders for a better country life who take pleasure in seeing the 

 young farmer climb the agricultural ladder to the position of 

 financial independence. On the other hand, some of them are 

 selfish, close-fisted men who enjoy making foreclosures. In 

 general a more systematic and standardized system of money 

 lending to farmers on mortgages is desirable. 



The agents for insurance companies make great numbers of 

 loans on farm mortgages. These agents are usually men who 

 know the local situation thoroughly and who receive a com- 

 mission from the company for placing loans. The insurance 

 company is in no hurry for its money, hence it prefers long-time 

 loans. Neither does it want land, hence it is not anxious to 

 make foreclosures. On the other hand, the insurance company 

 does not care to receive partial payments from time to time and 

 hence the farmer may have to accumulate his savings and hold 

 them without interest or receiving a low rate of interest while 

 he continues to pay the higher rate for the money he has bor- 



