7 3 
1913. 
FARM CREDITS IN THE UNITED STATES. 
No. 3. 
What shape shall our farm credit sys¬ 
tem take? This is now really a ques¬ 
tion for lawyers and legislators. We 
can lay down the broad principles of the 
system and let the attorneys work out 
the details, but it is our business to see 
that the laws provide a practical work¬ 
able system. After all the discussion 
the whole thing narrows down to a few 
very simple principles. Let us take the 
mortgage credits first. Here we have a 
choice of two or more plans, all worked 
out. In all of these plans there are three 
basic principles, namely: 
1 . The issue and sale of debentures. 
2. The creation of a redemption 
fund. 
3. A small annual payment, in addi¬ 
tion to the interest, by which the debt is 
finally zviped out. 
The Landschaften or society of bor¬ 
rowers is the simplest and most eco¬ 
nomical method of financing farm mort¬ 
gages without government subsidy. In 
this society the members are selected. 
The loan is fixed by the society at, say, 
60 per cent of the value of the land, 
and the whole property mortgaged is 
pledged to pay the debentures. This is 
unlimited responsibility. It works well 
where farmers of a neighborhood are 
of comparatively equal grade and stand¬ 
ing. Where there is objection to un¬ 
limited responsibility, as is usual when 
co-operative credits are first adopted 
the land mortgage banks are organized 
and the money is loaned from them di¬ 
rect to the borrower. In some cases 
these mortgage banks loan also to the 
landschaften, taking the debentures of 
the local society, which reloans the 
money out to its members. We should 
organize such a farm mortgage bank in 
the State. We could then leave it op¬ 
tional with the borrower whether he 
associated himself with neighbors in un¬ 
limited responsibility or secured his loan 
direct from the bank. In either case 
the expense of securing the loan would 
be paid by the borrower, and it will be 
readily seen that the society method 
would be cheapest. Every member of 
the society is interested to see that the 
new borrower gets no more than he is 
fairly entitled to, while the universal 
sense of fairness in members would 
secure him a just amount. The other 
members, being responsible for the loan, 
are also interested to see that payments 
are made promptly, and that the con¬ 
dition of the farm is maintained. These 
are all gratuitous services safeguarding 
the bank without expense to it. On the 
other hand, the bank would have to in¬ 
cur expense in making a loan to an in¬ 
dividual farmer. It would have to 
secure an appraisal of the farm and 
examine the title and inquire into the 
moral risk of the borrower and main¬ 
tain a system of inspection and collec¬ 
tions of the annuities. This expense the 
individual borrower would have to pay, 
sc that he could not expect to get his 
loan as cheap as the members of the 
society. Those who have followed this 
series of articles will recall that in 
Switzerland the borrower makes out his 
application for a loan on blanks fur¬ 
nished him by the mortgage bank. He 
gives a detailed description of the farm, 
including its estimated value, assessment 
for purposes of taxation, income, etc., 
and I believe something of his own an¬ 
tecedents and traditions. This applica¬ 
tion is signed and sent to officials of the 
canton (county) ; if they confirm it, 
they send it to the bank and the loan is 
made. Later on if the borrower fails 
to keep up his payments and the bank 
loses, it may go into court, to prove that 
the canton officials deceived them. If 
it proves that the application was not 
true at the time it was made, the bank 
recovers its loss from the canton; but 
the canton has the privilege of taking 
over the farm, by paying up the arrear¬ 
ages and protecting itself through sale 
to someone else. The provisions are 
useful as precautions. In practice there 
is practically no loss or embarrassment. 
Of course, a man making such a record 
would be debarred from ever making 
another loan, unless there were extenu¬ 
ating circumstances. This method seems 
to be cheaper and more efficient than 
the method pursued by the Credit Fon¬ 
der in France, where the bank under¬ 
takes to gather the information and 
supervise the loan for itself; but where 
a large volume of business is carried 
the expense in either case is insignifi¬ 
cant. We have here then a choice of 
three methods which are already work¬ 
ing well; and we have a choice of 
THE? RT_JR-A.lv 
adopting one of them or combining them 
to suit our conditions, The landschaften 
or society plan of unlimited responsi¬ 
bility would seem to be especially 
adapted to the borrower for drainage 
and similar improvements in definite lo¬ 
cations. This feature should at least 
be made optional. 
The most important thing of all 
is to so safeguard the debentures 
that they will sell readily to investors 
an4 be absorbed at a low rate of inter¬ 
est. They should be made legal security 
for savings banks and trust funds, and 
exempt from taxation, because the 
mortgages would be taxed, and to tax 
the debentures would be to double the 
burden of taxation. The bank would 
have a foundation capital and a sinking 
fund as a safety margin above the 
mortgages which should be maintained 
in the aggregate to equal the total issue 
of debentures. The basic capital of the 
bank could be increased from time to 
time to maintain a ratio with the issue 
of debentures outstanding, and a per¬ 
centage of profits would annually in¬ 
crease the surplus. The rate at which 
the debentures would sell would regu¬ 
late the interest rate of the mortgage. 
To this would be added a fraction for 
expense and amortization. The small 
annual payments would always increase 
the security of the loan and the interest 
and payment would be less than the aver¬ 
age borrower pays now in interest alone. 
The mortgages should be written for 
terms to suit the borrower, for 10 to 75 
years. They could not be called by the 
bank until expiration, but the borrower 
should have the privilege of paying in 
full at any time. Such a system would 
secure a loan at a small interest rate, 
relieve the farmer from all anxiety 
about renewal of mortgages and ulti¬ 
mately wipe out the mortgage through 
smaller annual payments than he pays 
now in interest charges alone. The sav¬ 
ings of the people would go into the 
debentures and the hundreds of mil¬ 
lions that are now annually lost in get- 
rich-quick schemes would be saved to 
the people and furnish them a steady 
income. The laws that safeguard the 
mortgage debentures would also protect 
the small savings and inexperienced in¬ 
vestor from worthless stock and bond 
promoting schemes. john j. dillon. 
EVENTS OF THE WEEK. 
DOMESTIC.—An explosion of the boiler 
of a rotary snowplow on the Great North¬ 
ern Railroad and an avalanche that 
wrecked a stalled freight train laden with 
oriental imports for the East on the St. 
Paul and Puget Sound Railroad, compli¬ 
cated conditions December 31 in the Cas¬ 
cade Mountains, Washington, where the 
Northern transcontinental railroads were 
fighting one of the worst blizzards of the 
last twenty years. Five men were injured, 
two probably fatally, in the boiler ex¬ 
plosion, and one man was severely hurt in 
the avalanche. Snow in the mountains 
was eleven feet deep on the level. 
The importation of matches containing 
white phosphorus was forbidden after 
January 1. This is the first provision of 
the “phossy jaw” bill passed at the last 
session of Congress. Hereafter all matches 
imported from abroad must be accompa¬ 
nied by a certificate of inspection by the 
Government of the country where they 
were made stating they contain no white 
phosphorus. This official inspection certifi¬ 
cate will not be required until April 1 
next. The exportation of white phosphorus 
matches will be prohibited after January 
1, 1914, and one year later, on January 
I, 1915, an internal revenue tax of two 
cents a hundred will be imposed on all 
white phosphorus matches. 
Parcels post troubles at the Gary, Ind., 
postofilce began December 30, when W. 
II. F. Parry, a brick dealer, sent two big 
wagon loads of heavy paving brick to be 
mailed out the first thing. There was one 
thousand bricks, each brick wrapped sepa¬ 
rately. and their total weight was six 
thousand pounds. The bricks are being 
mailed as samples. 
Swift & Co., of Chicago, were charged 
by the State Food and Dairy Commissioner 
at Philadelphia January 2, with selling 
rotten eggs in that city, through their 
local branch. The State chemist testified 
that he had examined a crate of eggs from 
Swift & Co. and that seventy of the eggs 
were absolutely rotten, sixty-one were 
spotted, and the rest were “bad enough.” 
The chemist declared that it was the cus¬ 
tom of the big shippers to put a layer of 
good eggs at the top of the crate, and 
that the eggs “were rottener and rottener 
the deeper he got.” Out of thirty-six eggs 
in the lower section of a crate, he found 
twenty-six were as “bad as eggs can get.” 
More than twice as many persons were 
killed in street accidents in New York City 
during 1912 as in the entire State outside, 
according to the report of the National 
Highways Protective Society, while the 
number of deaths in the city from vehicular 
traffic increased from 423 persons in 1911 
to 532 last year. The total number killed 
by motor cars was 221, as against 142 in 
1911, and 91 drivers ran away after an 
accident, as compared with 60 the year 
before. Trolley cars killed 38 children in 
this city last year and 96 adults, and 
wagons killed 85 children and 92 adults. 
Unstate automobiles caused the death of 
127 people, wagons killed 28 and trolleys 
79. a total of 234. The total number of 
persons injured in New York in 1912 was 
2.363, automobiles being responsible for 
1,342, trolleys for 704 and wagons for 317. 
Six persons, including two women and 
NEW-YORKER > ' 
two children were killed at Denison, Iowa, 
January 4, and one is dying as the result 
of a grade crossing accident when a 
Northwestern passenger train, running fifty 
miles an hour, hit a buggy. 
January 3 the steamship Julia Lucken- 
bach was rammed in Chesapeake Bay by 
the British steamer Indrakaula. The 
Luckenbach sank immediately 13 persons 
being drowned; eight of the crew were 
rescued several hours later by the Dutch 
steamer Pennsylvania and five others by 
the Indrakaula which was severely 
damaged by the collision. 
A writ of supersedeas staying execution 
of the sentences imposed on the dynamite 
conspirators recently convicted at Indi¬ 
anapolis, was issued by the United States 
circuit court of appeals at Chicago January 
3. Bail was based on the number of years 
which the prisoners have been sentenced to 
serve—.$10,000 for each year. Thus Ryan's 
bail was fixed at $70,000. Those who re¬ 
ceived sentences of six years must furnish 
$60.000; four years, $40,000, and so on, 
down to $10,000 for the one-year sen¬ 
tences. Defense lawyers stated that 
money enough to admit all to bail would 
be forthcoming. 
In the first seven days since the parcel 
post began 223,000 packages were mailed 
in New York City. According to Post¬ 
master Morgan’s report 81,587 of these 
were deposited between midnight, Janu¬ 
ary 5, and the same hour January 6. This 
beats the record of the previous twenty- 
four hours by 30,000. The total number 
of packages delivered in the twenty-four 
hours was 25,731. Wagons and auto trucks 
took 3,155 of these to their destinations 
and carriers delivered 22,576. 
Direct competition, national in scope, 
between the Wells Fargo Express Company 
and the Federal parcel post will go into 
effect as soon as plans which the company 
has been maturing for the past four years 
can be set afoot. This was the statement made 
at San Francisco Jan. 7. by C. R. Graham, 
traffic manager of the company, at a hear¬ 
ing before the State Railroad Commission. 
Competition, Mr. Graham explained, would 
extend to both rates and services, with 
special regard to eggs, butter, poultry and 
other perishable foodstuffs, to be delivered 
direct from shipper to consignee. He said 
eleven pounds would be the maximum 
weight acceptable, as with the parcel post. 
The tanker Rosecrans, once a United 
States army transport, was lost January 7 
on Peacock Spit, just beyond the bar at 
Astoria, Oregon, in a furious gale that 
drove her on the rocks. Of her crew of 
thirty-five men only four were saved. The 
Rosecrans was originally launched in 
Scotland as the Methven Castle, and has 
had an adventurous career. The cargo 
loss is put at $200,000. 
FARM AND GARDEN.—The American 
Pomological Society will hold its next 
annual meeting in Washington, D. C., about 
November 15, 1913. 
A larger appropriation to eradicate the 
cattle tick in the Southern States than the 
$250,000 of last year was urged upon the 
Senate Committee on Agriculture January 
4 by State veterinarians and others from 
Louisiana, Tennessee, Georgia, Alabama, 
Florida, North Carolina, Arkansas and 
Mississippi. 
Trof. Kennedy of the agricultural de¬ 
partment of the Nevada State University 
will ask the Legislature to make a horti¬ 
cultural survey of the State to determine 
the availability of various valleys for the 
growing of fruit. 
The Illinois Commission Bill. 
The State of Illinois passed a law reg¬ 
ulating to some extent the commission mer¬ 
chants and dealers. Among other provi¬ 
sions of this act was one under which a 
Board of Inspectors was to be appointed, 
and licenses issued to commission men. The 
Illinois Supreme Court decided that these 
parts of the bill were unconstitutional, but 
it also decided that the other parts of the 
bill were sound. As the law is left there¬ 
fore, commission men are required to ren¬ 
der an itemized statement of all sales to 
the consignor. They are obliged to give 
the gross amount of the sale, the freight or 
express charges, and all charges against the 
goods which may reasonably be incurred 
and net proceeds of the same. The com¬ 
mission men are required to keep a record 
of all figures and facts in the case of such a 
sale, and these records shall be opened for 
investigation at any time upon the request 
of any consignor of goods, or his authorized 
agents or attorneys. The law provides a 
penalty of from $10 to $20 for each offense 
for the violation of the above provision, 
with the costs of suits added. The com- 
mision man is to stand committed until the 
fine and costs are paid. It is provided that 
in the case of clerical error, or unavoidable 
cause, the commission man or firm would 
have 10 days from the date of sale to ren¬ 
der his statement or account. 
Advertising the Apple Trade. 
During the past two weeks the news¬ 
papers have given much space to the ef¬ 
forts of the Housewives’ League to sell 
apples. The plan was to show the pub¬ 
lic that apples may be sold for considera¬ 
bly less than the retailers demand. This 
would prove that the margin between 
producer and consumer is too large, and 
if persisted in such agitation would make 
apple eating popular and increase sales. 
We should all understand, however, that 
retailing apples in this great city is a 
peculiar trade under present conditions. 
Hundreds of small grocers in New York 
retail apples from barrel stock, but at 
prices that seem extravagant compared 
with their wholesale cost. Why should 
a retailer who pays $3 to $4 for a barrel 
of apples insist on charging 10 or 15 cents 
per quart? The facts are, however, that 
these people do not care to handle apples 
and the apparent profits are not nearly 
all “velvet.” A barrel or two of apples 
clutters their stores, which are already 
crowded in an effort to get the value of 
their rent. Every sale of two quarts or 
more requires a strong paper bag. The 
apples must be sorted and there is more 
or less waste unless sold at once. Many 
jobbers and wholesalers do not deliver free 
and many small grocers have no horse, so 
a truckman’s charge must be paid for 
every barrel. All of these extras, which 
are not visible to an outsider cut severely 
into the apparent profit. They must keep 
apples, but in many eases the fewer they 
sell the better. Wagon peddlers and push 
carts, where they are allowed, do good 
work in apple distribution, but there 
should be many cheap apple markets 
mere temporary sheds if necessary, where 
barrelled apples can be handled with lit¬ 
tle expense and within reach of the multi¬ 
tudes. There is now space along the water 
front, used as storage for trucks and whole¬ 
salers, which might at least be shared by 
apple retailers to the great benefit of New 
York consumers. 
THE CHURCH AND FARM PROSPERITY. 
I have now taken your paper for a little 
over a year, starting in with your 10 cents 
10-week offer. I want to tell you how 
much I think of your work. As a young 
man coming from a suburban charge to a 
country district I found a great many new 
things to interest me in my work as a 
minister, but none that struck me more 
forcibly than the fact that in spite of all 
that one hears about the prosperity of the 
farmer, when compared with other lines of 
work the farmer did not seem to be getting 
enough for the time and labor and capital 
he furnished. The more I observed and 
read and studied the more convinced I be¬ 
came of this fact. When I started taking 
your paper and saw that you certainly were 
striking at the same point and doing it well, 
I considered that your work in this respect 
is the best you are doing. 
The church in the country, particularly 
the “open country,” cannot prosper as it 
ought until some of these things are reme¬ 
died. Country life is carrying too great a 
handicap in some of these respects. I hope 
to see the church as a whole take up the 
consideration of some of these things and 
do something, if it be no more than a state¬ 
ment of recognition. I sometimes wonder 
that you do not give a little place to the 
country church in your excellent paper. 
I trust that this coming year you will 
give us all you can with regard to coopera¬ 
tive attempts. It is along this line that 
much of the future development must come. 
Last of all I want to congratulate you on 
the high standard of advertising you main¬ 
tain. I am of the opinion that there are 
points in this respect where religious papers, 
or some at any rate, might well profit. 
[Rev.] a. s. clayton. 
Orange Co., N. Y. 
New Education for Farmers. 
I am sending you a clipping from the 
Baltimore Daily Sun of February 13. The 
writer of this letter to the Sun has hit 
the nail on the head, I think. [The clip¬ 
ping states that the experiment stations 
and institutes are not reaching the “aver¬ 
age” farmer. It advocates more “experts” 
or traveling agents or teachers. R. N.-Y.] 
I do not believe that the farmers as a class 
are receiving the proper instructions from 
the various States. Money is being spent, 
but the farmer is not getting the benefit 
of it. As a rule he does not get the bul¬ 
letins issued by the experiment stations. 
The average farmer is not a letter writer, 
so he does not write to his station for them. 
His Congressman does not send him bulle¬ 
tins on agriculture, but sends him speeches 
and garden seeds. There are farmers who 
get the bulletins of the United States and 
the stations: I do for one, but never un¬ 
less I write for them or am down on their 
mailing list. The farmer as a class cannot 
get this done. 
How much the farmer learns from rail¬ 
road educational trains, and how much 
from lectures, I do not know, but I don’t 
believe much. Most of the people who go 
with the trains and do the talking are not 
practical farmers, and they do not convey 
their information in plain terms. It is as 
our friend says: “Unless a man is a black¬ 
smith he cannot teach a boy to make shoes 
and shoe horses.” A book farmer cannot 
teach a practical farmer much. We must 
have some of that sort of information, of 
course, and the scientific people have found 
out a lot that the farmer would never have 
found out, but now they want the practical 
information. The idea of distributing prac¬ 
tical farmers as educators about amongst 
the farmers is a fine one. I think. They 
would come in actual contact with the 
farmer and his conditions, and conditions 
vary all the time. He is told in the books 
to do so and so. He finds it absolutely 
impossible, whereas the practical farmer 
visiting him could make suggestions that 
would help him out. The farmer educator 
can talk to the farmer in his own language 
so to speak. Farmers are advised to make 
their own fertilizers, and it pays them to 
do it, but it is the hardest thing in the 
world to find a place where one can buy 
the ingredients. As matters are worked 
now the farmer is left to find out a whole 
lot himself and he has no chance to do it, 
so he has to go along in the same old way. 
I know the real working farmer wants to 
get his information from a practical educa¬ 
tor, and to educate in agriculture you must 
be practical; book learning will not do It 
all. 
The experiment station is doing good 
work in its line, but the results do not 
reach the average farmer. Let the State 
employ practical farmers backed by enough 
scientific information to explain their points 
and send them about amongst the farmers. 
Then, I think, you would see 40 bushels of 
wheat to the acre where you see 13 bushels 
now. and the increase would be the same 
in all crops. 
Farming unfortunately has not evoluted 
along with other things. The isolated life 
of the farmer. I suppose, is the trouble. 
The farmers’ clubs in Maryland have done 
a lot of good, but there are not enough of 
them. At the club meetings practical 
farmers meet practical farmers, and they 
have confidence in one another, so they all 
learn something. The visiting farmer, sent 
out by the State, would largely supply the 
shortage in farmers' clubs. It is likely the 
experiment stations of the various States 
would oppose this scheme of visiting farm¬ 
ers as State money is hard to get and the 
stations really require more than they get. 
The average farmer cannot get to the ex¬ 
periment stations; he hasn’t the money or 
the time, so the experiment station in the 
way of the visiting farmer could go to 
all the farmers, talk to them, and dis¬ 
tribute literature that would suit any case 
in point. a. nelson. 
Long Island. 
