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l
EMAGOGUES of various stripes have always
succeeded in evoking some applause from
mixed audiences by misrepresenting and
denouncing the banks as instruments of
oppression, financial vampires that suck the life-
blood of commerce and industry. ‘ Those who be-
lieved them imagined that the country would be
better 0H withou‘t banks. At times they made
many converts among the farmers, probably be-
cause the farmers have received little direct
benefit from the. banks. But the farmers have .
learned that business can not prosper without
- adequate banking facilities. especially as a means
of providing capital. and they have discovered
at farming is a business which requires the aid
of banks as mu as does any other mercantile
or industrial undertaking. And so, instead of
decrying the banks that are not adapted to their
financial requirements, they aredemanding. and
tuted for the special purpose of furnishing them
with the capital needed to carry on farming to
better advantage
In fact we are not a bank oppressed people but
are actually suffering from the need of, more
banks. To state it more exactly, -although we
have National banks, State banks and trust com-
panies, savings banks and loan and building as-
sociations, known in some localities ascooperative
banks, and each class answers the purpose for.
which it was designed, we need yet another class
of banks to serve the agricultural interests as the
National and State banks and trust companies ,
serve the mercantile and manufacturing interests.
The primary function of a bank of any kind is
to gather from its depositors money. that other-
nurse would lie idle. and set it to work by loanin
it to those who need it for carrying on or expand-
ing their business enterprises, thus promoting the
prosperity of the communi y. Savings hanks, be-
ing investment institutions. invest their deposits
mostly in public securities and corporation stocks
and bonds, and in that way help on the develop-
ment of the country; they do make an occasional
loan on rsal estate security but are inclined to
look askance at farm mortgages. The loan and '
building associations make a specialty of -loaning
on real estate for the purpose of helping the
people to buy and own their homes. but they
operate chiefly in the cities and large towns and
are not much help to the farmers. National and
State banks. the latter usually called trust com-
. panies. are designed to finance the mercantile in-
terests. and. being obliged to stand ready to pay
their depositors at any time on demand, loan
their money to business men and corporations on
1.. short time or demand notes andcan not accom-
- , modate the farmer who wants a long time loan.
Most business. even the biggest. is largely de-
pendent on borrowed capital, and farming is no
exception. Yet the farmers were the only busi-
'ness class that had no moneyed institutions for
their financial benefirand so. when forced to
borrow capital, they were at the mercy of private
money lenders, land sharks and usurers who ex-
acted exorbitant interest rates. But this condi-
tion will cease to exist six months hence when the
government puts in operation the Farm Loan
Associations and Federal Land Banks recently
authorized by Congress. provided the farmers
are alert to avail themselve of the benefits of
this important and much needed piece of legisla-
tion.
I x
. Federal Land Banks and Farm Loans
stock. but if not wholly subscribed within thirty
days after the opportunity is offered. the Secretary
of the Treasury. in behalf of the U. S. government.
‘ will subscribe for the balance to provide the lack-
ing funds to bring the capital up to the requisite
$750,000. This stock sliould be a good invest-
ment for the people as it is expected to pay divi-
dends to the ‘owners out of the earnings of the bank.‘
Each bank will start business with a paid in
capital of $750,000 to loan to farmers within its
district. but, as this is by far too small a sum to
meet the requirements of r credits in one
twelfth part of the United States. the bank is au-
thorized to increase its funds, as required, by
issuing and selling farm mortgage bonds up to
twenty times its original capital. ‘Thus when its
original capital is loaned out on farm mortgages,
it may issue and sell to the public an equal amount
of bonds secured by the farm mortgages it holds.
The proceeds may be loaned out on other farm
mortgages and another series of bonds issued and
sold, and the process may be re ted until the
bank has sold bonds and loaned money on farm
mortgages up to twenty times its capital stock.
This would give each bank $15,000,000 and the
entire twelve 21 total of $180,000,000 to loan on
first mortgages of farms. These bonds will bear
interest at not over five per cent. will be tax
exempt, and although their payment is not guar-
anteed by the government they will be secured by
farm mortgages besides being the bank's direct
obligation and will undoubtedly find a ready
market as a safe and attractive investment.
The Federal Land Banks will, loan to farmers in
sums of not less than one bu
l or ‘irnproving farm
property, or to buy live stock. fertilizer, farm
machinery and other equipment. The interest
rate will not exceed six per cent and the time of
payment must be not has than five nor more
tllian forty years, and may be on the installment
D an '
With only twelve Federal Land Banks in the
United States it would be very inconvenient to all
concerned if the farmers had to get their loans
directly from these banks. To obviate this difficul-
‘ty the law provides for the chartering of National
Fa Loan Associations to consist of ten owners
of farm lands in any locality where an aggregate of
at least $20,000 of farm loans is required. The
Federal Land Banks will make their loans through
these local organizations which will examine the
properties offered as security and pass on the
loans. In places which have no F arm Loan
Associations loans will be made through local
agents and local banks and trust companies. In
all the cases mentioned the money will come from
the Federal Land Bank and the entire system will
be under the supervision and control of the Na-
tional Farm Loan Board appointed by tliePresident. ‘
The law also authorizes the chartering of Joint
Stock Land Banks with a capital of not less than
$250,000 each for the purpose of loaning their own
funds on farm mortgages. These joint stock
banks will not be furnished with money by the
Federal Land Banks but will be permitted to issue
Farm Mortgage Bonds to fifteen timesfthe amount
of their capital stock and will be under the ‘super-
vision of the National Farm Loan Board.
It is to be noted t.hat..t.‘t: l"euEral’L'a‘n'd“ rlinrrks
stituted by the go'emtnent in any event and that
the requisite capral will be furnished by the U. S.
treasury unlessne people see fit to subscribe it
But the establirlment of Joint Stock Land Banks
[Rand mouth
to the number of ti ve and no more. will be in- -
Uncle Sam to Establisha Chain of Banks for the Special Benefit of the Farmers V ‘
gage in banking of a kind for which they should
be especially qualified by eir experience and
knowledge of farm values.
The farmers have been badly handicapped by
lack of capital to improve, stock, equip and oper-
ate their properties and by having to pay excessive
interest rates. but it will be their own fault if, in
the future, they suffer these hardships through
failure to cooperate with the government in start-
ing and extending the service of the land banks
and farm loan associations as the merchants and
manufacturers have in organizing National banks
for their benefit I ‘
. Prices Still Soaring
ESTRUCTION has outrun production in con-
D sequence of half the world having been at
war for the last two years. and we are suf-
fering our share of the calamity to the
extent of higher prices for everything and depri-
‘vation of many things that have become exceed-
ingly scarce, some even to the degree of being
unobtainabie at any price. Week by week the .
condition becomes more acute, the supply of one
article after another diminishes to the vanishing
point and prices in general keep advancing and
will continue to do so as long as the war lasts.
Unfortunately the end of the conflict is not yet
in sight and we must expect still higher prices
this fall and coming winter. so that weare justi-
-fied in repeating our advice that it will be prudent
, and economical to stock up early this season.
The’ dealers are having a hard time. High
hm A prices cut down their sales and dissatisfy their
(Vina: who accuau-th or excessive profits
'cus A , em
while in fact they are making less than at
the old prices when their goods cost them less.’
Competition is,sharp and in their efforts to hold
their tradeand satisfy their customers they have
sacrificed apart of their profit by refraining from
putting their prices up in proportion to the in-
crease in cost. What we stated in last-month's, ‘
issue as to higher cost of dress-goods and clothing
3PD1les equally to furniture and other goods.
liven our ink and paper on which this magazine
is printed cost much more than a year ago.
The Infantile ‘Paralysis Plague ,
N epidemic of that dread destroyer infantile’
Dafalvsis, broke out in the tenement district
of New York City about a month ago It
, spread with unprecedented rapidity and is
still raging with unabated fury despite the best ‘
efforts of the health officers. A large proportion
of the cases terminate fatally and man of ‘K3
victims who survive are left in such crip lied I
dition that death would have been a Ii)-efe cg?-
result There is no known remedy oi? CWQZVE
against being swindled by any pets ff -
.pretended remedy for infantile paraly)sci':;.0 enng 3
Prevention by quarantine and oth ‘
precautions is the only effective protecei'io:anI't[i’i;:.(, -
disease is very contagious and a patient while
suffering an attack of it should be as strictly -
quarantined as a case of scarlet fever or diph- '
theria, and the same care should be taken to
disinfect everything that comes from an afflicted
person, especially the secretions from the nose
' The disease may be carried in the
cloth,-,<;Lthe patient or of persons who come in
contact witEhirn, also by flies. The utmost
cleanliness is inditsneusable. Young children are
most susceptible to the disea. but -it also attacks’
is left entirely 0 private enterprise and initiative, - ‘persons of all ages. This 9Pi‘1W-; 1"“ alreadll
and therejs ntlirnit to the number that may be spread to a number of Places Outside A 9" Yofk
l.
.
E
HE act of Congress. above mentioned, divides
the country into twelve districts and pro- . . ,-3 ‘
vides for the establishment of a Federal chartered Tb ple in any locality can obtain and it is feared the plague will overrun the e.$Q. 7?‘'--
land Bank in each district. Each Federal
Land Bank must have a capital stock of at least
$750,000 before it begins business. The ple
will be permitted to subscribe for and own this
a charter andatart a Joint Stock Land Bank of
their own, rovided they have the necessary
$250,000 cartal. Here is an opportimity for
Wealth)’ fafters and small-town capitalists to en-
country unless e most careful measures are
adopted everywhere to prevent such a disaster. i
COMFORT’S EDITOR. ,
. Conroar, PUBLXSHED MONTHZY Br ,W. H. CANNETJ‘, Pin3., lNC.,.AT Aucusra, MAINE.
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l, Entered at the poll office at Auzulln. Maine as second dun mail matter. Coprrishla 1915 (TING-Mlrk Registered): 5! W. H. Gumell, Pub. Inc.
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