CAPITAL 297 



where farm mortgages rarely bring as much as 6 per cent. 

 The practice of the dealers is justified by the expense of 

 collection, bad debts, and by the fact that the dealers are 

 forced to take on the functions of a bank, a business for 

 which they are not well situated. It would be much 

 better if we had means of securing adequate credit directly, 

 and if the feed, fertilizer, machinery, and other articles 

 were purchased for cash. 



Farmers are not much given to buying on the installment 

 plan. This is even a worse way of obtaining credit. The 

 fact that there are many collections makes it necessary 

 to charge a still higher rate of interest. Another objection 

 to buying on the installment plan is that it is usually used 

 as a bait to lead persons to buy things that they cannot 

 afford. Houses in the city are sometimes bought on the 

 installment plan to good advantage. 



189. Farm mortgages. If land values are fairly 

 stable, it is usually safe to mortgage a farm for half its 

 value, provided the money is wisely used in the farm 

 business. If crop yields are uncertain, the danger from a 

 heavy mortgage is greater than where yields are uniform. 



Farmers often come to look upon the money obtained 

 by a mortgage as a permanent part of their capital. This 

 is a dangerous view to take. One may sometimes con- 

 tinue to renew a mortgage from time to time to good 

 advantage, but this money must never be looked upon as 

 a part of the permanent capital. One must always be pre- 

 pared in advance to either pay or renew a mortgage. 

 The agreement for renewal ought to be made at least a 

 year before a mortgage becomes due, so that there will be 

 no trouble. It must be remembered that while money 

 obtained on a mortgage greatly increases the chances of 

 making money, it also increases the chances of losing. 



