LAND RECLAMATION POLICIES IX THE UNITED STATES 37 
rate sufficient to cover the interest paid by the Government and the 
cost of administering the bureau. 
If Federal aid to reclamation is placed on that basis, it will no 
longer involve a subsidy and can be justified on the ground that it 
is, in effect, a loan for land improvement, like any loan made by a 
farm loan bank. There would still be a question of the wisdom of 
making advances for this purpose at this time, and the question of 
security for the advances made. 
As to the wisdom of making advances for land reclamation at a 
time when there is already an overproduction of farm products 
there would seem to be considerable doubt. If it is the duty of the 
Government to encourage agricultural production when it is not 
supplying our needs, it should, equally, be its duty to discourage it 
when there is overproduction. 
As to security for advances for reclamation as compared with the 
security for farm loans: The farm-loan bankers loan not to exceed 
50 per cent of very conservative valuations of the land and 20 per 
cent of the insured value of the improvements on which the loans 
are made; while in land reclamation the advances are, in many cases, 
many times the value of the land on which the improvements are 
made, and the real security for the advances is the future production 
from the land reclaimed. In other words, advances on farm loans 
are highly conservative investments, while advances for reclamation 
are highly speculative investments. In fact, the reason for Govern- 
ment adances for this work has been the. fact that it was difficult to 
get private parties to take the risks involved in such investments. 
If advances made are not repaid the result is a subsidy just as truly 
as if there had been no agreement to repay. If there were a shortage 
of agricultural products the Government might take these risks — 
or grant a subsidy — for the sake of overcoming the shortage, but 
when there is no shortage there does not seem to be any good reason 
for doing so. \Vhen there is a shortage there is a tendency for prices 
to be so high that there will be no necessity for Government aid 
either with an actual subsidy or with low rates of interest and easy 
terms. Under a Government reclamation scheme without subsidy 
there would be no difficulty in obtaining funds. This, however, is 
not an unmixed blessing. Under private initiative difficulty in ob- 
taining funds decreases as the need for the work increases and vice 
versa. There is an organic connection between the two. On the other 
hand, the demand for Government aid increases as the need de- 
creases. That is, the demand for Government construction conies 
when it appears that it will not pay anyone else to do it. 
Government construction might make possible the carrying out of 
a national policy for the selection of the land that should be re- 
claimed, and prevent the attempt to farm lands that should not be 
farmed : but the Government is, in fact, subject to political pressure, 
by local interests concerned with reclamation, and it is difficult to 
withstand this pressure. 
Government reclamation work probably woidd assure adequate, 
water supply and honest construction, which have not always been 
assured under private enterprises developed for profit. This assur- 
ance should help to bring about prompt settlement and use of the 
reclaimed land, and that Government participation is an influence 
