1 
American Agriculturist 
THE FARM PAPER THAT PRINTS THE FARM NEWS 
“Agriculture is the Most Healthful, Most Useful and Most Noble Employment of Man”—IFo^hmgfon 
Reg. U. S. Pat. Off. 
Established 1842 
Volume 111 
For the Week Ending May 26, 1923 
.Number 21 
How Federal Land Banks Help Farmers 
One Answer to the Need for a Dependable Source of Farm Financing, 
T here is no doubt that changing eco¬ 
nomic conditions in the country is 
compelling the farmer to look toward 
some of the newer systems that afford 
credit to the man on the land. The Federal 
Land Bank is organized under a law which 
was approved by President Wilson in July, 
1916. The Act grew out of many years of 
discussion and agitation looking toward a 
more comprehensive credit system for farm¬ 
ers. To a great extent it was modeled upon 
the experience of Europe where — especially 
in Denmark — somewhat similar institutions 
had been functioning for many years. 
It should be recognized that the theory of 
the organization of the Federal Land Bank 
is to some extent altruistic. Stu¬ 
dents of farm economics — more . 
perhaps, than the actual farm¬ 
ers themselves — had long insisted 
that when the farmer sought a 
loan he did not have the same 
facilities or receive the same con¬ 
sideration that was accorded to 
other industrial classes, although 
I understand the bankers admit 
that in proportion to the security 
he has to offer the farmer is a 
relatively small borrower. 
By JARED VAN WAGENEN, JR. 
generally extended to the farmer the same 
considerktion and courtesy that was shown 
to, say, the village grocer, but in the East 
the bankers almost universally fought shy 
of farm mortgages. In some ways they are 
sound in this position because a farm mort¬ 
gage can hardly be regarded as a quick 
asset. 
Then, too, there is another factor that has 
come into the case since the days of our 
rather hectic Liberty Loan “drives.” I feel 
that up to that time each rural corhmunity had 
money enough to finance its own require¬ 
ments. Nobody had much money. Mostgener- 
w 
A Case of Who is Borrowing: 
A great industrial corporation 
or railroad system decides that it 
wishes to borrow a million or sev¬ 
eral million dollars and it an- 11 
nounces that a bond issue will be 
sold and wide publicity is given to the fact. 
In some cases if the security and terms seem 
favorable the demand will be so eager that 
the entire issue of many millions will be sold 
within an hour or two after the books are 
open to receive subscriptions. “Receiving 
subscriptions” seems to be the official term 
for borrowing money by selling bonds. Now 
a hundred million dollar bond issue against 
the property of some enormous corporation 
is, in no real essential, different from the 
procedure of Mr. Jones and wife who wish 
to place a mortgage of $2,000 on their hun¬ 
dred acres of land with buildings. But if 
Jones lives in the eastern States at least, the 
village banker will hardly be interested and 
unless he has a well-to-do neighbor who hap¬ 
pens to be looking for an opportunity to 
invest a little money, he will hardly know 
how to go about the task of finding someone 
to loan him this sum- on what is really the 
yery highest class security. 
strictly a Business I'ransaction 
In talking with New York State farmers 
I do not get the impression that the local 
banks have discriminated against them as a 
class. As a matter of fact, banks need bor¬ 
rowers and indeed must have them if their 
business is to be profitable. The loaning of 
money to a man with good credit is not solely 
a favor on the part of the bank, but it is a 
business transaction which ought to be ad¬ 
vantageous to both parties. In the matter of 
small temporary loans the country bank has 
Farm Credit Information 
HAT about all this talk about credit for farmers? Recently 
we asked Mr. Van Wagenen to go up to the Federal Land 
Bank at Springfield, Massachusetts, and get the facts as to how the 
Federal Land Bank helps farmers with their mortgages. 
On this page is what Mr. Van Wagenen found, written in his usual 
interesting and readable style. You cannot read this article without 
having a very clear understanding of just how the Federal Land 
Bank works and how you should go about it to borrow money from 
the bank on a mortgage. 
Later we will have other articles on other features of farm credit, 
including information about the new credit’ legislation passed 
the last Congress.—The Editors. 
Our County had once a man — dead now 
for more than a generation — who was a re¬ 
markable example of the rural financier. I 
know of no reason why I should not give his 
true name — “Joe” Brown. Only the other 
day I passed the little white “story and a 
half” frame house on a little street of the 
hamlet where he lived. He was long recog¬ 
nized as the richest man in our County, 
having> it was said, something like $300,000 
— a vast sum in that day or even now among 
farm people. Practically he recognized only 
one form of investment — local farm mort¬ 
gages. He may have been narrow and penu¬ 
rious — miserly, if you will, “but he was not 
hard—rather a gentle, kindly, merciful man. 
He held scores of mortgages all 
over northern Schoharie County 
and was a community banker in 
every thing save name. 
Doubtless many envied him his 
wealth, but it is remembered con¬ 
cerning him that almost never did 
he foreclose a claim or seek col¬ 
lection through the courts. 
ally the savings of long years of thrifty, fore¬ 
handed farmers was represented by saving 
bank deposits and by local farm mortgages. 
Then came our great war time campaign for 
funds on the part of the Government and 
under the stress of patriotic appeal together 
with the impulse of sound business judgment 
about all of this floating rural capital was 
safely locked up in the world’s premier se¬ 
curity—Uncle Sam’s promise to pay. These 
same bond campaigns also taught the people 
that there were many other ways of investing 
money—some of them mighty poor ones. 
One Reason for the Land Bank 
In any case the rural districts were pretty 
well sucked dry ofi floating capital and the 
local money lender having entrusted about all 
his savings to the Government at Washing¬ 
ton is no longer able to finance Jones when he 
comes across lots to see him. I am sure that 
this is exactly what has taken place and that 
is one reason why some institution like the 
Federal Land Bank is more necessary than 
of old. 
I suppose that almost every farm com¬ 
munity has had its local farmer-financier and 
let it be noted in passing that only rarely 
was there a local Shylock. Many of these 
old mortgages included considerations of 
neighborliness, personal friendship and not 
infrequently sympathy; and forebearance 
and consideration were stretched to the limit. 
It was fine—this human, personal relation¬ 
ship. 
A Man of Mercy 
• He was accustomed to instruct 
hard-pressed men to “keep enough 
to pay the taxes and make your 
family confortable and if there is 
anything left over, bring it to 
me.” He was an ancient man 
when he at length died near the 
close of the long period of lean 
years that followed 1870. It was 
said that his estate was much smaller than it 
it would have been 20 years before because 
there was so much unpaid interest in arrears 
and so many farms where the decline in land 
values had largely wiped out the original 
equity. I doubt not that when Joe Brown 
shall answer “Here” and stand to plead at 
the bar of the Great Assize, it will be found 
written in the Book that in very many cases 
he had, in the phrase of old “Micah,” “done 
justice and loved Mercy” and dealt with the 
affajrs of simple men in kindly ways. 
Well, his career ended more than a genera¬ 
tion ago. If he was living to-day I feel sure 
that he would have made the discovery that 
there were superabundant opportunities to 
buy securities of all sorts, including a long 
list ranging from United States Government 
Bonds down through State and city and 
township and even local school districts, the 
returns from which are free of all income 
taxes and are also safer and freer from an¬ 
noyance and vexation than farm mortgages. 
In a word he would not now serve the com¬ 
munity as he did then. 
A Need for Dependable Farm Financing- 
There is surely a growing need in the farm 
country for an accessible and dependable 
source of farm financing. The Federal Land 
Bank was established primarily to meet this 
need. 
I have done an occasional job of farm ap¬ 
praisal for the Land Bank ever since its 
{Continued on page 454) 
