63d Congress Special Session of V the Senate ’ SENATE Document No. 5 The PROBLEM OF RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES AND A PROGRAM I PRESENTED BY MR. GORE March 17, 1913.— Ordered to be printed WASHINGTON 1913 1 [ ! i 3 THE PROBLEM OF RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES AND A PROGRAM. No problem which confronts the farmers of the twentieth century is more important than that of rural credit or farm finance. A cen- tury ago conditions were different. The problem then was not so difficult or so important. At the present time, almost every farmer ^ at some time during the year, or during a series of years, needs more money or credit than he has available. This is true in every civilized country where farm products enter the world market. No country in the civilized world is so nearly without satisfactory and adequate rural credit facilities as is the United States at the present time, or, if satisfactory institutions and adequate facilities exist, no group of farmers is further behind the times in the utiliza- tion of these institutions and facilities than are the American farmers. At the same time no country is more able to provide the necessary institutions and facilities than the United States, and no group of A people can offer better bases for credit than the American farmers. Admitting then, first, that at the present time, unlike the condition V of a century ago, farmers need a great deal of money or credit; second, ^ that we do not at the present time have adequate credit institutions ^ or facilities, or if we have them do not use them to their fullest capac- ^ ity; third, that adequate bases or securities are available; and, ^ fourth, that credit would be forthcoming {a) if farmers understood the possibilities of the present institutions, or (&) if slight changes were made in our present system, or (c) if new institutions were estab- lished, it behooves us to take active steps either to make the changes 'v^ich are needed and which can be made with so little effort, or to show farmers how to take full advantage of the present opportunities IS ANYTHING WRONG? F There are many who say that there is nothing wrong with the present vsystem and that all who deserve credit now receive it easily, j But there are a hundred evidences that something is wrong with the present system, else why the activity of the Southern Commercial , Congress? That body has arranged for a commission of 100 or more members collected from all parts of the United States who will spend several months in Europe during the coming summer at a cost of probably $125,000, gathering information concerning farm finance in European countries. Again, why the activity of the various State bankers’ associations and even the American bankers’ association? These organizations have been sending members as delegates to study the rural credit system of Europe during the last year, and many bankers have gone independently to study the same problems. Nor IS that all. Even the Department of Agriculture, which in the past 4 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. has largely devoted itself to scientific ])robleins of production and which has become the leading office of its kind in the world in this res})ect, but which has largely neglected the problems connected with the business side of farming, has at last made a hasty, but, so far as available reports show, a more or less superficial study of present conditions and needs of farmers in this country. That department has given the public the benefit of some of its findings. The Depart- ment of State has become active also. Ambassadors and ministers to European countries have been called upon to report in detail as to the status of agricultural credit in their respective countries. Indeed, President Taft practically commissioned the ambassador to France to act as general in chief of this crusade to bring all of the new light possible to the American people. The Division of Information of the Department of State has undertaken to supply the press with little stories pertaining to improved rural credit gleaned from reports from abroad. Further than this, the President, swept on by the great clamor which bids fair to bring with it a reorganized system of farm finance, although possibly influenced to some extent by political exigencies, addressed a message to the governors of the various States calling upon them to marshal all the forces at their disposal to carry on the new campaign for improved rural credit. Documents were attached to his letter contending that a quarter of a billion dollars a year could be saved to the farmers of this country by a change of some kind. The governors of the different States discussed the sub- ject thoroughly at a great conference at Richmond, Ya., and even conferred with the President at the White House concerning the proper steps to take. And, finally, as if determined to make sure that all available information were brought together. Congress has appro- priated $25,000 to be expended in an effort to assemble all data. It would seem that volumes have been written during the last few months and other volumes are doubtless being written. College professors are writing in scientific journals, farm papers are clamoring for discussions on tliis subject, and many schemes are being ad- vanced — some unfortunately poorly digested. Towering above aU the rest, the International Institute of Agriculture, with headquarters . /at Rome, Italy, is now sending volumes to this country describing ^ rural credit systems in various European countries, and each of the three leading political parties in tliis country has a plank in its plat- form pledging reforms. As a result of all tliis activity the country may be deluged with a mass of legislation wliich, unless properly directed, might comphcate the situation rather than simphfy it. Unfortunately, practically all of the studying which has been done has reference to conditions in the European countries. Unfortunately, also, a considerable number of people who are dealing with this question assume that some European system can be bodily transported to this country. This assumption naturally is based upon the further assumption that the institutions wliich we now have in this country can not do the business because they are not now doing the business, and that, therefore, a complete new set of institutions must be established in aU parts of our land. Others, however, are satisfied that a slight change in laws is all that is necessary. The above picture may seem to be overdrawn. I think not. I, myself, am an enthusiastic supporter of the program for investigating further the situation in European countries and beheve that the EUEAL CEEDIT OE FAEM FINANCE IN THE UNITED STATES. 5 Southern Commercial Congress has taken the first long step looking toward some definite solution of this problem, and I hope it may be supported in its efforts by all persons really interested in improving the present system. But at the same time I believe that the time has come when we must look into the situation as it actually is in tins country, in order that we may not attempt things winch are un- necessary and do tilings which will have to be undone at a later date. Fortunately, some of the foremost leaders in the movement in tliis country at the present time have as broad an outlook as any states- men of the time. It will be their effort to guide tilings aright and prevent actions which will throw discredit on the movement. And yet I believe it not improper to sound a note of warning, because it is already clear that men from many States, even in the State legislatures and in the National Congress, are now drawing up bills which they hope to force through into laws without further study, and it will not be at all surprising if hundreds of measures appear during the next few months. There has not yet been any complete di^nosis of the disease that is to be cured. Tliis should precede the s^rch for a remedy. ''The tasks at the present time are four in number; First, a com- prehensive study of the needs, the real needs, of this country; sec- ond, a concrete study by American delegates of conditions as they actually are in European countries; third, continued popular dis- cussion, newspaper and magazine articles, and general consideration of both foreign conditions and American needs; and, fourth, the prescription — the necessary laws. I doubt very much whether it is desirable to attempt any new laws on the subject for at least a year or two. It doubtless is perfectly proper to mtroduce bills havmg m mind bringing out discussion and encouraging people to submit arguments for and against various policies, but I would strongly advocate that few laws be actually passed and approved for at least one or two years. Knowing that the European ground is bemg thoroughly studied at the present time (I, myself, have assembled an immense quantity of literature on the subject) and, believing that we need careful study of conditions at home before the commission of the Southern Commercial Congress sails, I have compiled the following paper, believing that it may make people study the institutions at home and think of the needs at home as they examine European conditions. THE SITUATION IN AMERICA. In order that we may see the problem in its simplest form, let us examine some of the facts concerning the United States as a whole and one representative State. Probably no better State could be selected than Wisconsin, and, therefore, I shall present in each case figures for the United States and for this State. I believe that there are many special reasons why Wisconsin should be chosen to compare with conditions in the United States as a whole, and they will be brought out in the following discussion. Facts similar to those given for Wisconsin can be compiled for any State in the Union and most of them are available for any county in the United States, if desired by any person. 6 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. BASES FOR RURAL CREDIT. The best bases for rural credit are the different classes of farm property (land, buildings, implements and machinery, and live stock). These, under the farmers’ directions, annually result in the production of valuable goods (especially food, clothing, and beverages) in abundance. These products are also good bases of credit. So, too, are the prospects” of the farm as a going, con- cern,” and so, too, are the farmers’ good names. Before passing to a study of the value of farm products, let us briefly examine the latest reports (1910) showing the amount of farm property and its value. The following table carries for the United States and for Wisconsin the items which seem most necessary for a true interpretation of this subject: Number, area, and value of farms United States, 1910 (Apr. 15). Wisconsin, 1910 (Apr. 15). Population 91,972,266 2,333,860 Urban population i 42,623,383 49,348,883 1,004,320 Rural population 2 1,329,540 Number of all farms 6,361,502 177, 127 35,363,840 21,060,066 11,907,606 118.9 Approximate land area acres.. Land in farms 1 do Improved land in farms do Average acreage per farm 1,903,289, 600 878,798,325 478,451,750 138.1 Average improved acreage per farm 75.2 67.2 Per cent of total land area in farms 46.2 59.6 Per cent of land in farms improved 54. 4 56.5 Per cent of total land area improved 25.1 33.7 Value of farm property, total $40,991,449,090 $1,413,118,785 Land 28, 475, 674, 169 6,325,451,528 1,265,149, 783 4,925,173,610 911,938,261 289,694,462 52, 956, 579 158,529,483 Buildings Implements and macbinery Live stock Average value per farm, all farm property $6, 444 $7,978 Land 4, 476 994 5, 148 1,636 299 Buildings Implements and macbinery 199 Live stock 774 895 Average value of farm property per acre of land in farms, all farm property $46. 64 $67. 10 Land 32.40 43.30 Buildings 7.20 13.76 implements and macbinery 1.44 2.51 Live stock 5. 60 7.53 1 Population of incorporated places having, in 1910, 2,500 or more inhabitants. 2 Total, exclusive of urban. (See note 1.) Having before us the principal facts concerning farm property, let us now turn briefly to the value of the farm products referred to. The following table shows for the United States and for Wisconsin the gross value of farm products for the year 1909, as presented by the Thirteenth Decennial Census. It also shows the various classes which go to make up the totals. It should be understood, of course, that there is a large amount of duplication between the crops and live- stock products, in view of the fact that large amounts of the crops are fed to the live stock, and therefore appear in a more advanced form under live-stock products and live stock sold and slaughtered. It is not necessary, however, in a brief study of this sort to try to arrive at the net value of all farm products. EUEAL CEEDIT OE FAEM FINANCE IN THE UNITED STATES. 7 Gross value of all farm 'products of the United States and for the State of Wisconsin, 1909. United States. Wisconsin. Amount. Per cent of total. Amount. Per cent of total. Gross products of the farm All crops $8,498,311,413 100. 00 $267, 716, 403 100. 00 5,487, 161,223 65,472,328 901,597 306,688,960 202, 506,272 5,992,083 596,413,463 1,833,175,487 64.60 .80 (U 3.60 2.40 .10 7. 00 21.60 148,359,216 1,267,285 1,082 9, 526, 784 4,653,649 235, 723 53,868,028 49,804, 636 55.40 .50 0) K 3. 60 1.70 ■ .10 20. 10 18.60 Wool Mohair Eggs Poultry Honey and wax Dairy products Animals sold and slaughtered ’ Less than one-tenth of 1 per cent. INCREASE THE FARM AREA. I find by reference to the first table given above that the approxi- mate land area of the United States is 1,903,289,600 acres; for Wisconsin it is 35,363,840 acres. Of these areas 878,798,325 acres, or only 46.2 per cent, of the land area of the United States is in farms and 21,060,066 acres, or only 59.6 per cnnt, of the total land area of Wisconsin is in farms. Wisconsin is considerably ahead of the United States in this respect, but still offers great possibilities. It is true that a considerable part of the land not reported as in farms is occupied by cities, towns, and villages, railroad rights of way, roads, etc., or is owned by mining corporations, but probably a much larger part is held by the United States, the different States, corporations, individual speculators, or others than farmers. At least, it is not at the present time being used for farming purposes. Much of the land not now in farms would be occupied and farmed if institutions were available which would furnish prospective farm- ers with money or credit. It should be made possible for them to occupy and operate this land. Assuming that the institutions exist, prospective farmers shoidd be taught to use them to the utmost. One of the first problems to be solved, therefore, is how to provide a system by which laborers and tenants or other interested parties may become owners and operators of the land not now in farms. In the past the National Government has interested itself in this prob- lem and has given away large tracts of land. It is still interested. Many States which still own millions of acres of land are interested. Several States, so far as disposing of State land is concerned, now have very satisfactory policies. Probably none has a better system in this respect than Minnesota. To any who are interested in the policies of that State, I will refer to an article which appeared in the American Economical Review (Vol. II, No. '2, June, 1912), entitled ^‘Marketing of agricultural land in Minnesota and North Dakota.’’ Railroad companies are interested. So, too, are many individuals. The biggest problem here is to work out a system by which })OQr men may purchase land not now in farms, may develop it, and oper- ate it. Each State should carefully list and describe all such land in a public document and should also work out a system whereby it might be brought into farms. 8 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. INCREASE THE IMPROVED LAND AREA. Probably more important even than the problem of bringing more land into farms is the problem confronting farmers who already o})erate farms whether as owners, tenants, or managers. It is really remarkable that only 478,451,750 acres, or 54.4 per cent of the land in farms in the United States is reported to be improved by the farmers who operate them, while in Wisconsin only 11,907,606 acres, or 56.5 per cent of the farm land in that State is improved at the present time. In this respect it will be observed Wisconsin is slightly ahead of the country as a whole. But the farmers of Wisconsin, as well as of all the other States, still need literally millions of dollars in money or credit in order that they may improve the land which is in their farms, but which is now undeveloped. It is true that some progress is being made, but the movement is very slow. During the last 10 years there was an increase of 63,953,263 acres, or 15.4 per cent in the amount of improved land in farms in the United States as a whole. During the same time the population of all cities in the United States over 2,500 in size increased almost 35 per cent. The increase in the acreage of improved land in farms in Wisconsin was only 660,634 acres, or 5.9 per cent. It certainly can not be denied that it would be possible, if proper steps were taken, to improve many times as large an area in the same length of time. Land must be drained; timber and stumps must be cleared from land which could be used to better advantage for agricultural purposes; brush and stones must be removed ; land must be irrigated ; and in various other ways unimproved land now in farms could be brought into use. Implements and machinery with which to improve the land must be purchased, and power for this purpose must be supplied. The new land must also be equipped in order that it may be cultivated. The demand, therefore, is for labor, power, and equipment with which to improve and develop the land, and also labor, power, and equipment, with which to operate the land after it has been improved. THE SECURITY. But you ask, ^'What security can be given?” The reply is, ‘‘The farm property itself can be pledged to advantage.” If the farm prop- erty could be pledged to advantage in time of need (1 ) without months of delay, (2) without great cost for negotiating loans, (3) without having to pay such high rates of interest, and (4) with the privilege of paying off the debt at the first opportunity it w^ould be of great advantage to the people of the United States as a whole. According to the latest census reports, the value of farm land (including farm buildings) was $34,801,125,697 for the United States in 1910, while the value of the same class of property in Wisconsin was $1,201,632,723. The average value of this class of property, per acre of land in farms, was $39.60 for the United States as a w^hole and $57.06 for the State of Wisconsin, while the average size of farms w^as 138.1 acres for the United States as a whole and 118.9 acres for Wis- consin. Thus the average value per farm w^as $5,471 for the United States as a whole, as compared to $6,784 for Wisconsin. KURAL CREDIT OR FARM FIXANCE IX THE UNITED STATES. 9 FARMS OPERATED BY OWNERS, MANAGERS, AND TENANTS. But you may say that the farm property in the United States (which would include Wisconsin farm property) is already pledged to some extent. It is interesting to note how comparatiyely small this is. In 1910 there were in the United States 3,948,722 farms owned by the operators who liyed upon them. At the same time the numher in the same class in Wisconsin was 151 ,022. There were 2,354,676 farms operated by tenants (including croppers and all other classes of renter) in the United States and 24,654 in .Wisconsin. In the United States as a whole 58,104 farms were operated by hired managers, while in Wisconsin 1,451 were in this class. Thus for the United States as a whole 62.1 per cent of all farms were operated by their owners, whereas in Wisconsin 85.3 per cent were operated by farmers who owned their land. These farms operated by their owners might easily be offered as security if there was any adyantage in doing so. Although 62.1 per cent of all farms in the United States were occupied by their owners, they occupied 68.1 per cent of all land in farms, 64.8 per cent of the improved land in farms, and 64.3 per cent of the yalue of land and buildings. Referring now to Wisconsin, we find that whereas 85.3 per cent of all farms were occupied by their owners, they had charge of 82.5 per cent of all land in farms, 80.8 per cent of the improyed land in farms, and 79.3 per cent of the yalue of land and buildings. This should giye us some idea of the extent to which farm operators could pledge the farms in their charge, both in the United States and the State of Wisconsin as a representative State. Even the farms operated by tenants might be pledged by their owners, especially if the owners lived comparatively close to the farms and were able to supervise the improvements. PRESENT INDEBTEDNESS AMONG OWNERS. It is worth while to inquire at this point to what extent farm owners operating their own farms ha\ e real estate mortgages at the present time. The latest reports of the Census Bureau show that 2,621,283, or 66.4 per cent of all resident farm owners in the United wStatcs were free from mortgage indebtedness in 1910. It also shows that 72,941, or 48.6 per cent of all resident farm owners in Wisconsin were free from rnortgage debt. The number with mortgage indebtedness in the United States was, therefore, 1, 327,439, or 33.6 per cent, whereas the number in Wisconsin was 77,129, or 51.4 per cent. (A small number of farmers were unwhling or unable to state whether the farm was mortgaged, or to the amount of the indebtedness.) It should be noted that no information is at hand showing the extent of the mortgage indebtedness of farms operated by tenants and man- agers. It is clear, howe\ er, from the ilgures given that approxi- mately one-half of the Wisconsin farmers who own their farms have mortgage indebtedness, whereas approximately one-third of the farmers in the United States as a whole who are operating their own farms have mortgage indebtedness. There are those who will at once cry out that farmers in Wisconsin are in a bad financial condition, since a larger jirojiortion of the farmers in the State ha /e indebtedness than is found in the United States generally. The very opposite is probably true. Wisconsin prob- ably stands nearly at the top, for, while only 62.1 per cent of all 10 KUEAL CREDIT OR FARM FINANCE IN THE UNITED STATES. farmers in the United States own their farms, 85.3 per cent of Wis- consin farmers own their own farms. Farmers in Wisconsin who have mortgage indebtedness frequently are owners with mortgages because they prefer this to tenancy. Again there are those who are prone to believe that farmers who have mortgages borrow money in order to buy more land. An exam- ination of all reports from Wisconsin show that the 69,407 farmers who own their entire farms and have no mortgage indebtedness have 7,718,094 acres of farm land, or 111.2 acres per farm. Those who own their farms but have mortgage indebtedness number 71,121, and have 8,003,831 acres, or 112.5 acres per farm. It must be clear, therefore, that the second accusation is not true. In Wisconsin, at least, land ownership with mortgage indebtedness is a substitute for tenancy. There is room for more of this particular kind of substi- tute. It should be noted in passing that whereas tenancy inci eased 16.2 per cent in the United States as a whole during the last 10 yeais, in Wisconsin it was only 7.2 per cent. Also, whereas only 36.1 per cent of all farmers in Wisconsin are owners free from mortgage,^ 39.2 per cent of all farmers in the United States are; so that it is pei- fectly clear that the owners with mortgage indebtedness are substi- tutes for tenancy. The following table shows the situation in WTs- consin : Mortgage indebtedness in Wisconsin. Item. Owners free. Owners mort- gaged. Number of farms 69,407 7, 718, 094 4,254,707 S317,526,350 $112,173,141 $19,819,312 111.2 61.3 $4,575 $1,616 $286 $4. 66 71,121 8,003,831 4,443,594 $327, 653, 653 $109,338,662 $20, 974,915 112.5 62.5 84,607 $1,537 $295 $4. 72 Land in farms acres. . Improved land in farms do Value of land Value of buildings . . . Value of implements and machinery '. Average acreage per farm Average improved acres per farm Average value of land per farm Average value of buildings per farm Average value of implements and machinery ner farm Average value of implements and machinery per acre of improved land.. Aside from borrowing money to help to pay for a farm, and thus avoid tenancy, farmers generally borrow to improve more land, to build better buildings, and to better equip their farms. The follow- ing statement shows the situation for the whole United States: Mortgage indehtdeness. United States. Item. Owners free. Owners mort- gaged. Number of farms 2,295,277 311,219,206 147,456,032 $8,236,155,223 $2,507,823,468 $444,410,437 135.6 64.2 $3,588 $1,093 $194 $3.01 1,059,620 153, 704, 109 86,352,565 $5,205,679,466 $1,360, 980, &59 $287,441,317 145. 1 81.5 $4,913 81,284 $271 $3.33 Land in farms acres.. Improved land in farms do Value of land Value of buildings Value of implements and machinery Average acres per farm ! Average improved acres per farm .Vverage value of land per farm Average value of buildings per farm Average value of implements and machinery per farm Average value of implements and machinery per acre of improved land . . 1 Those who own their entire farm and have no mortgage indebtedness. KURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 11 It should be noted that for all farmers who own their farms and have no mortgage indebtedness, the average acreage of improved land is 64.2 acres, while for all farms operated by their owners who have indebtedness the average is 81.5 acres of improved land, or 17.3 acres more per farm. Clearly mortgage indebtedness seems to have been a factor. It may be said at once that the farms of owners who have mortgages are also larger, but please note that the farms have on the average only 7 per cent more land, but 27 per cent more improved land. Further than this, the investment in implements and machin- ery for owners with mortgage indebtedness is $0.32 or about 10 per cent greater per acre of improved land than for owners free from mortgage. Again mortgage indebtedness seems to have been ad- vantageous. Still another point may be mentioned. The average value of buildings for all farms in the United States operated by their owners without mortgage indebtedness is $1,093, wliile the average for farmers with mortgage is $1,284, or $191 more per farm. It would seem that these farmers were really leaders. The question naturally arises at once as to the extent to which those who have debt have mortgaged their farms. The latest reports (1910) show that the average value of land and buildings per farm for all ifarms with mortgage indebtedness was $6,289 for the United States as a whole and $6,160 for the State of Wisconsin. The average amount of the debt was $1,715 for the United States as a whole, and $2,116 for the State of Wisconsin. In other words, the ratio of debt to value of the property mortgaged was 27.3 per cent for the United States as a whole, and 34.3 per cent for Wisconsin. From these figures it is clear that at the present time not only does a larger percentage of the resident farm owners in Wisconsin have mortgage indebtedness than the average for the United States as a whole, but, likewise, the amount of debt per farm is greater for Wisconsin than the average for the United States as a whole, and the ratio of debt to value is considerably higher. BETTER TITLES. The advantages of a good mortgage system are many, and the hrst demand is for an improved land-mortgage system. If fp.rmers could secure smaller amounts of money for shorter periods of time at lower rates of interest, with land (including buildings) as security, not only would tenancy be reduced but farmers would more rapidly drain the wet places, remove stumps, carry away the stones, clear the brush away, and bring into bearing much of the land now in farms but un- improved. This is really the first pressing problem. But lov/er rates of interest can not be expected until land titles have been perfected and land surveys have definitely established absolute boundaries. In sections of the country where land titles have been thoroughly established and where there are no further disputes concerning boundaries, where the abstracts of titles have been brought up to date and are accepted by land mortgage companies, savings institu- j tions, and lenders generally, farmers are able to borrow money at 5 I or 6 per cent at the present time. It will, therefore, be necessary, first, to thoroughly establish present titles and boundaries. This can be done best by passing laws in the several States providing for a modern or twentieth cen- 12 RUEAL CREDIT OR FARM FINANCE IN THE UNITED STATES. tury method of land title registration. I suggest a system modeled after the Torrens system, which has been tried and tested for many decades in the various Australian and Canadian Provinces and dif- ferent European countries, and to some extent by American States, and which has been accepted by the National Government for the Philippine Islands. As a result of the first step, lower rates of interest would be secured, less time would be wasted looking up titles and verifying abstracts, and less expense would be incurred in negotiating loans. Here, then, is a saving in both time and money. • LAND MORTGAGE ASSOCIATIONS. But it is even more important that the farmers be placed in a position so that they may borrow smaller amounts of money for shorter periods of time with real estate as security. The mortgage system is used almost entirely by young farmers who wish to buy their first piece of land and have only a small amount of money with which to make first payment, or by established farmers who desire to buy more land, improve more land, build more buildings, or better equip their farms. This should be encouraged and the system improved and extended. In order to secure smaller amounts of money for shorter periods of time, for these purposes, it may be advantageous for farmers to form land mortgage associations. Companies composed of people who have money to lend, or who could locate those with money to lend, would immediately be formed to supply the new demand, if new institutions of this kind are necessary. It has not yet been clearly shown that any new organizations for this purpose are neces- sary in this country. More study and investigation is necessary. I have not gone exhaustively into this subject, but find after a hasty examination of various reports that there are in the United States (according to the Report of the Comptroller of the Currency, 1911) 24,392 institutions with a regular banking business of one kind or another. There are 7,277 national banks, 12,864 State banks, 635 mutual savings banks, 1,249 stock savings banks, 1,251 loan and trust companies, and 1,116 private banks. In other words, there was one banking institution for every 4,000 persons in the United States. Turning now to Senate Document No. 1003, Sixty-second Con- gress, third session, page 6, January 13, 1913, I find in connection with the Money Trust inquiry the following statement: The figures for Germany were collected by equally competent authority, yet the most painstaking investigation reveals for 1907 only 490 banks with 1,730 branches (not including, of course, the municipal and State savings institutions and the coop- erative credit societies which perform some of the functions of the banks). If these figures show the total number of banking institutions aside from municipal and State savings banks and cooperative credit societies, Germany has only about one institution for every 30,000 persons, compared to one institution in the United States for every 4,000 persons. Clearly most of the institutions in Germany must be the small savings institutions and cooperative credit societies instead of State and private banks and small national banks. After adding the number of all cooperative credit societies, including those in KURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 13 country districts and cities, towns, and villages, I find that there is an average of one for approximately 4,000 persons, or about the same as the average in the United States. It would seem, therefore, that we now have in the United States approximately as many institu- tions per capita as Germany has even when we include among the German institutions all of the rural credit societies which are now being so carefully investigated. The same general conclusions apply to France. I need not go farther than this, and only relate these few facts in order that I may point out that we may have at the present time enough institutions in this country and only need to change them to make them supply the peculiar needs of the time. Upon examination of the conditions under which institutions chartered by the different States operate, we find that, generally speaking, the State banking laws are free from restrictions that would hamper the State banks and trust companies in extending loans liberally to responsible farmers or associations of farmers with real estate as security. Certainly these institutions would be in a very good position to deal with groups of farmers if they were organized into land mortgage associations and if titles were registered. No State denies State banks this privilege, and such restrictions as exist upon their activities are generally not burdensome. Restric- tion on the amount of real estate loans exist in Michigan, New York, Ohio, Pennsylvania, South Carolina, Texas, and Wisconsin. Restric- tions as to the ratio of the amount of loans to the value of real estate exist in Minnesota, Ohio, and Texas. Real estate loans are legally limited to first liens in California, North Dakota, Oklahoma, Pennsyl- vania, and, under certain qualifications, in New York. Similar restrictions are found in a few States in the real estate loans of trust companies. (Cf. Samuel A. Welden, ^'Digest of State banking stat- utes,’’ Tables A and C; Report of National Monetary Commission, S. Doc. 353, 61st Cong.) Before leaving this discussion of the activities of the State banks, it will be worth while to note that there were in the United States (Report of the Comptroller of the Currency, 1911) 12,864 State banks. The total resources of these banks was reported to be $3,747,786,000. This is an average of $291,340 per bank. Of the total resources of these State banks, the comptroller’s report shows that $489,661,000, or $38,000 per bank, or 13.1 per cent of the total resources, represents loans secured by real estate. These figures are given merely to show that State banks do have a considerable part of their resources loaned with real estate as security. But it is impossible to show how much of this was loaned to farmers and how much to real estate owners living in cities. It is sufficient here, however, to call attention to the fact that almost $500,000,000 were loaned with real estate as security. Attention should also be called to the fact that there were, accord- ing to the same report, 1,116 private banks in the United States, although no such institutions exist in some States. The total resources of these private banks was reported to be $182,824,000, the average per bank being $163,820. Private banks have 20.5 per cent of their total resources loaned, with real estate as security. This is a larger percentage than found in the case of State banks, being more 14 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. than one-fifth of the total resources of all of these institutions. On the other hand, private banks invest less in bonds and other similar securities, and also keep somewhat less of cash on hand. Mention should also be made here of the fact that there were 1,251 loan and trust companies. The total resources of these instiutions was $4,665,111,000, or an average of $3,729,000 per bank. These institutions had loaned almost $500,000,000, or 10 per cent of their total resources, with real estate as security. Having in mind the State banks, private banks, and loan and trust companies, we find that $1,000,000,000 had been loaned, with real estate as security. Let s now refer to the activities of the 635 mutual savings banks, with resources valued at $3,762,402,000, or an average of $5,925^000 per bank. These institutions had $1,602,647,000, or 42.6 per cent of their resources loaned, with real estate as security. At the same time there were 1,249 stock savings banks, with resources valued at $889,912,000, or $712,500 per bank. These institutions had loaned $361,260,000, or 40.6 per cent of their resources, with real estate as security. These savings banks, therefore, loaned on the average more than two-fifths of all of their resources, with real estate as security, and had outstanding, according to the latest report, almost $2,000,000,000 in this class. Study should be made of the real estate loans of building and loan associations, insurance companies, and other similar organizations, or to loans by individuals directly or through brokers. In addition to all of these, attention is called to the fact that a majority of all national banks now having savings departments, and attention should be called to the fact that (Sept. 1, 1911) out of the total (7,301) national banks, 1,966 had a capital of only $25,000, and, therefore, presumably were located in towns of less than 3,000 inhabitants; 372 had a capital of between $25,000 and $50,000, and, therefore, presumably were located in towns of less than 6,000 inhab- itants. In addition to these banks with small capital, which amounted to almost one in each county in the United States, although they are not evenly distributed, there were 2,297 national banks with a capital of between $50,000 and $100,000. Except for banks in towns with less than 6,000 population, the law as amended in 1900 does not permit any national bank to be organized with a capital of less than $100,000. It has been suggested many times recently that the provisions of the national banking act (R. S., sec. 5137) are too rigid on the matter of loans on real estate securities. It has also been urged that the national banks, under proper regulations, be authorized ‘To establish savings departments and to lend no more than 40 per cent of their savings deposits upon productive real estate, such loans not to exceed 50 per cent of the actual value of the property.’’ This is the recom- mendation of the National Monetary Commission. If this amend- ment were adopted, loans might be made for short ])eriods for small amounts at comparatively low rates of interest. I noted above that a majority of the national banks now have savings departments. It is, therefore, possible at the present time to lend to some extent with real estate as security. In passing, I wish only to note that whereas there were according to the latest reports 7,277 national banks, with their resources valued at $10,383,050,000, or $1,427,000 per bank, only $65,112,000, or six- EUKAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 15 tenths of 1 per cent of their entire resources was loaned with real estate as security. It is perfectly clear that if national banks estab- lish savings departments more generally, and if they were permitted to lend 40 per cent of their savings deposits upon productive real estate, it might be possible for these institutions to take care of many of the needs which we have been considering. It is not my purpose, however, to outline in detail here what steps are necessary to finally solve the problem. It seems, however, that there probably are enough different kinds of institutions already thoroughly established in this country, and all that is necessary at the present time is to make slight modifications in existing regulations. Farmers’ land- mortgage associations would merely bring the farmers into closer and more advantageous touch with these institutions. Postal sav- ings funds and various State funds need not be used for this purpose, ^but should be preserved for other purposes. / ELIMINATE THE TENANT SYSTEM. ' There are in the United States 2,354,676 farms operated by tenants and in the State of Wisconsin 24,654. Tenant farmers shift from farm to farm and are generally the poorest farmers in the country. They are the land robbers par excellence. Legislation is necessary in order that a system of land loans may be evolved by which tenants or others may buy farms and by, a process of amortization gradually pay for them. Many model laws may be pointed to, especially in England and other European countries. The postal savings funds *and various State funds might be brought into use at this point. So, too, it might be justifiable for the National or State Governments to borrow money to lend for the purpose of keeping the tenant system from developing. LENGTHEN LEASES. It would be ridiculous to assume, however, that in this country, with all nationalities, with great numbers of negro farmers, and with free trade in land, tenancy could be quickly and easily eliminated. Indeed, hundreds of thousands of young men each year probably should start as farm laborers or tenants, and indeed should serve an apprenticeship and gradually become owners as the result of their own efforts. No government should lend to any prospective farmer unless he made at least a small cash payment and had had a year or more of farm experience. Large numbers of young men would be unwilling to purchase land under a scheme which would require them to pay for the land gradually over a period of 10, 20, or more years by a system of amortization. We should recognize the fact that different men have different capacities for farming as for other things. They differ in foresight, ambition, perseverance, frugality, and other qualities which go to make up successful business men. Some farmers would naturally remain tenants longer than others, even with equal oppor- tunity and under a uniform system of treatment. But we must con- serve the natural resources of the country, and, therefore, we should establish a system which will make it possible to conserve our natural resources and at the same time allow men freedom in operating their farms. Inasmuch as rotation of crops seems best, and inasmuch as 16 RUEAL CREDIT OR FARM FIXAXCE IX THE UXITED STATES. diversified agiieultiire has many advantages over most forms of s])e- eialization, and, fiiither, inasmiicli as stability and permanency is far better than constant changing and uncertainty for the tenant class, a system of leases should be worked out by which owners of the land inight lease to tenants for i)eriods of, say, five years or longer. Pro- vision should be made by which tenants would be compensated for im]n‘ovements and betterments. This is done in various countries and has })roved to be thoroughly practical)le. COMMERCIAL CREDIT v. MORTGAGES. Aside from (1) establishing a system whereby land not now in farms could more easily be secured by prospective farmers, and where- by new farms might be established, (2) perfecting titles and simplify- ing the system of negotiating loans, (3) modifying the laws governing the loaning with real estate as security, thus making possible the development of much land now unimproved and the better equipping of farms, (4) creating land-mortgage associations to bring farmers into closer touch with credit institutions, (5) substituting land ownerships for tenancy wherever possible by providing for long-time loans and a system of amortization for those who desire to take advantage of it, and (6) providing for longer leases where necessary. Farmers need more and better implements and machinery, also more and better power with which to cultivate their farms and carry on other farm work. They also need to increase the Ih^e-stock equipment on farms in order that the supply of dahy products, poultry and eggs, honey and wax, wool and mohair, and meats of the different kinds may keep up with the increase in population, and they need to improve the live stock they have. They must weed out lazy and inefficient animals and substitute productive ones. This must proceed not only in order to supply the new demands for live-stock products, but also in order that the immense outlay for commercial fertilizers may be reduced. The farmers as a result of this change may be able to increase again the annual yield of farm crops, and again make the supply keep pace with the increasing demands. The question immediately arises as to whether the present banking facilities are sufficient to supply these demands or needs of improved farm practice in addition to those considered before. Certainly it must be admitted that at the present time the needs are not supplied. This (1) may be the fault of the farmers or (2) it may be fault of those in charge of the credit institutions which now exist, or (3) it may be that the law makers are to blame for not authorizing the necessary institutions. Let us first assume that the necessary institutions now exist; what then? To be ch ’ ssponsi- bility between the farmers gotten together better. Let us analyze the situation. First of all it should be noted that (aside from the fact that national banks are not per- mitted to make loans on real estate security, which need not concern us here) there is no restriction in the national banking act which would interfere with loans to farmers for agricultural purposey ^Tersonal security alone is legally acceptable; the range of possible collateral security is practically unlimited; and there is no limitation fixed by law as to the period of loans. National banks, therefore, have a very free hand in regard to farmers.” (Cf. ^‘Agricultural credit in the RUEAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 17 United States/’ by Prof. E. W. Kemmerer, American Economic Review, Vol. II, No. 4 — December, 1912, p. 853.) Referring to the State banks, it may be said that the laws governing them are free from restrictions, with a few minor qualifications that would not hamper either the State banks or trust companies in extending credit liberally to responsible farmers. It would seem, therefore, that banking facilities are available if only they were properly and extensively used. The farmers must learn the advantages of credit as a means to the more economic working of the farm. They should learn about the advantages from the bankers; the agricultural press should tell them of its impor- tance; and so, too, should the agricultural colleges and schools. Of course, farmers should understand that money or credit should be secured onty when it is perfectly clear that additional capital can be used to advantage in some productive way, but it is certainly true that practically every farmer in the United States could use some additional capital profitably every year if they could secure small amounts at reasonable rates of interest without having to go to too great trouble to secure it, and also without having to wait too long a time when the money or credit was desired. In order that the movement may gain headway, farmers should learn to keep careful accounts; the country school arithmetic should be completely reor- ganized and should contain practical problems in interest and par- tial payments; country boys and girls should learn the possibilities of keeping accounts and should study simple banking problems. Courses in farm accounting should be better provided for in extension departments of institutions; country teachers should be prepared to teach the country boys and girls. It should be explained to the farmers at every opportunity that the banks of this country are open to them as to other business men and that the bulk of the short-time commercial loans in this country as likewise the bulk of the agricultural loans of Europe, are made on the very same security that they are capable of giving; i. e., two- name paper of honest, industrious business men. The real problem then, it seems to me, is to determine the simplest way to arrange among farmers the best forms of the two-name paper. At the same time, however, the bankers of this country should be brought to realize that one of the best kinds of paper in the world is short-time business paper bearing the names of two responsible farmers. The bankers should, therefore, advise the farmers in the same friendly way as they advise their city customers. Farmers should be made to feel that productive loans to them are not in the nature of favors reluctantly granted, but rather in the nature of busi- ness propositions as })rofitable to the bankers as to the farmers and given as gladly as received. In order that the two classes may get together, it is important that some system should be worked out by which financial ratings of farmers may be prepared and may be as satisfactory in every respect as the financial ratings of other business men. At the present time mercantile credit agencies do not rate farmers as extensively as they do other business men of like capital. Probably the real reason for this is that it is too expensive, and also that there is very little call S. Doc. 5, C3-Sp. Sess. 2 18 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES, for the ratings of individual farmers, while there are many incjuiries for financial re])orts of mercantile establishments. Before leaving this subject, I think it worth while to again call attention to the fact that there are 7,277 national hanks, as noted elsewhere in this ])aj)er, and that the total amount of their loans and de])osits amounted to S5,610,8()(),()0(). In order that we may better Understand the different classes of security, mention might he made of the fact that only $2,071 ,300, OOO was secured by stocks, bonds, other personal securities, or real estate security, and of this amount $953,800,000 was demand ])aper, secured by stocks, bonds, and other personal securities, the rest of it being time ])aper. At the same time loans and discounts amounting to $3,540,000,000 w^ere reported to he made with one or more individual or firm names. Of this amount $1,124,700,000 was time “single-name paper (one person or firm) without any other security, while $1,885,100,000 was time paper with “two or more individual or firm names.” In addi- tion to these two classes, loans amounting to $529,700,000 were re})- resented by demand paper with one or more individual or firm names. I do not find in the report which I have been (j noting that this demand paper has been divided into two classes — “single-name paper” and “paper with two or more names.” It would seem that farmers should find it ])ossihle, especially if they were organized, to borrow whatever was necessary for })r()- ductive })urposes. CREDIT UNIONS. I believe that for this purpose credit unions are m'cessary. They would take the place of the commercial agencies, but would go much further. They would not in any way conflict with the })resent bank- ing system. Grou})s of from io to 100 farmers could form credit unions. They could pledge the farm equipment (the im])lements and machinery and live stock) now on their farms, the ])rospect- ive live-stock products and growing croj)s, and, in genei-al, the season’s “prospects” and the farmers’ good names. It would then doubtless be possible for farmers to secure all the money or credit necessary to use on their farms as “going concerns.” Whenever any farmer desired money or credit he could make out his note. As a second signature on the note the business managers or chairman of the executive committee of the credit union would sign the name of the organization (with his name as official re])resentative). The officers of the executive committee might, of course, refuse to j)ledge the credit unions as a second security unless the money desired was for productive purposes, and also might refuse to sign if the amount desired exceeded the value of the farmer’s ])r()si)ects and his ecpii])- ment for the farm year over which the debt extended. At the same time the local hank where the credit union and all its mend)ers did business would be sure that money or credit advanced to members was safe. It is quite likely that this credit union should have a small capital and members should purchase shares. This ca])ital should, it seems to me, bo invested in the ca])ital stock of a local bank (State or National) or trust com])any, and the farmers’ credit unions should have members on the board of directors, and might even control many such institutions as time advanced. This would eliminate the nec(>ssity for establishing new banks exce])1 in s|)ecial cases. RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 19 MUTUAL INSURANCE. As a further precaution and security, the farmers of each com- munity should form a mutual insurance company. The farm build- ings of all members of credit unions or of land-mortgage associations should be insured. So, too, the farm equipment (implements and machinery) and live stock should be covered by the ^ ^farmer’s mutual’’ so that no ‘^members” may suffer, and so that the group” may not lose as second security. Even crop insurance is commencing to be better understood. A few years hence it may be possible (with the development of crop insurance) for a group of farmers to furnish bet- ter security than is now found in any part of the world. ELIMINATE STORE CREDIT. But what about current expenses of running the farm, money to buy groceries and other farm supplies, and to pay the blacksmith and the hired laborer to assist on the farm? At the present time those who have a fair surplus or balance generally pay cash; those who have considerable property and knowledge of good business principles secure the necessary credit at the local bank, and pay cash as the season advances; those who have neither surplus nor are able to secure satisfactory treatment at local banks depend upon ^ ‘store credit” almost entirely. This is the last or lowest and the most expensive form of credit and it is to be discouraged. But how? First, by encouraging diversified agriculture of such a nature that there will be some income each month to take care of curent expenses. Rotation of crops; increased yields; better utilization of labor and equipment; and better conservation of soils would accompany the first advantage aimed at. More attention and emphasis should be given in our various educational institutions to problems of farm management. Second, by the stablishment of the cooperative stores equipped to supply the demand of the members. Third, by securing a line of credit at the bank for this specific ])urpose. It may be that the credit union should indorse notes of members in order that they may secure money or credit and pay cash for supplies. In this event prices charged for supplies should be reduced. The local merchant would not have the present losses due to poor customers, and they in turn could pay cash for goods purchased and thus take advantage of discounts, etc. So, too, all along the line cash would be paid (by the use of money or credit instruments such as checks and drafts) and bad debts and losses would be less frequent while dis- counts for cash would be secured. With cooperative stores and the puchase of supplies in large quantities, further discounts would be in order and transportation charges would be reduced. Above all things let there be study for a few months or even a year or two both at home and abroad. We have needed these changes more or less for half a century and now that serious study has begun we should make a thorough job of it. What then is the program? RECOMMENDATIONS. First. Establish a system whereby new farms may be created and more land may be brought into farms. I^and for sale or available for settlement should be listed and described by the State, so that 20 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. prospective farmers might become acquainted with all of the pos- sibilities. Second. Improve, clear up, and insure land titles, and fix bounda- ries so that lenders and borrowers, buyers and sellers, may save time and money, and that worry and risk may be eliminated. The Tor- rens system of land-title registration, with such changes as may be necessary to serve local needs, now bears the stamp of approval of the most progressive countries of the known civilized world. Third. Authorize the formation of land-mortgage associations for farmers and outline scope of activities. Fourth. Amend State and National laws in such a way as to make it possible for State and National banks and trust companies to han- dle the class of securities which farmers are best able to furnish. This would make it easier for young and ambitious farmers to pur- chase farms and advance from tenancy to land ownership. It would make it easier to improve land now in farms but unimproved. It would make it possible to better equip and develop the farms in every way. Fifth. Establish a system by which farmers may become owners of land by a series of payments after the amortization scheme so well known. State funds of various kinds (such as educational, insurance, etc.) might be used for this purpose. Sixth. Improve the leasing system, so that tenants may become more permanent in their communities and may accumulate enough to make first payment and eventually become owners. Improved system of agriculture would result, yields would increase the re- sources would be preserved, and both owners and tenants, as well as society, would be more justly treated. Long leases, with com- parison to tenants for improvements and betterments, are necessaiy. Seventh. Keform the courses and methods of teaching arithmetic in country schools and show farm boys and girls the possibilities of farm accounts and the first principles of banking. Eighth. Perfect the system of rural commercial credit by author- izing the formations of credit unions and prescribing their peculiar field in this country. Ninth. Extend insurance in agriculture as rapidly as possible in order that all may bear the burden of unforeseen happenings more nearly equal. Tenth. Eliminate as rapidly as possible the present store credit system by the establishment of the cooperative store by a reorgani- zation of farm practice and the establishment of a more regular farm income and by use of the credit unions. CONCLUSIONS. The whole country would be benefited by the changes recom- mended above. Farmers would become better business men and be more prosperous; the cost of production would be reduced and con- sumers should as a result get farm products cheaper; lenders of money would find a better market than at the present time, and there would be less risk and uncertainty; men who would now become farmers if they could, would have an opportunity; farmers who are RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 21 now tenants would have a better chance to become owners, even though unable to save much during any one year; no individual farmer would suffer from loss if the mutual insurance system were univer- sally adopted. Indeed, from every point of view, there would seem to be many reasons for gradually making the various changes sug- gested above. The need, however, is for a year or two of study in order that much of the detail may be worked out. Much can, how- ever, be done at once. To be sure, there will be no opposition, but good statesmanship would not allow this to obstruct progress. Some lawyers and ab- stract companies will probably object to an improvement in the title system because they gain more from the present uncertainty. Some mortgage loan companies now in existence will probably object because it would take from them the large commissions which some of them now make. Possibly some insurance companies would object because now they frequently reap great profits from insuring farmers against loss. Many objections of various kinds will come to the minds of all who read the above suggestions with care, but no lasting or legitimate objection has come to the mind of the writer. Resources of the different classes of financial institutions in the United States and in Wisconsin. UNITED STATES. National banks (number of institutions, 7,277). Items, Resources. Average per institution. Per cent of total. Loans, discounts, and overdrafts, total $5, 634, 236, 044. 79 $774, 252. 58 54.3 Secured by real estate (including mortgage owned). . . 65,112,003. 29 8,947. 64 .6 Secured by collateral other than real estate 2,004,993,992. 88 275,524. 80 19.3 All other loans 3,540,732,790. 84 486, 564. 90 34.1 Overdrafts 23,397,257. 78 3,215. 23 .2 Bonds, securities, etc., including premiums thereon, total. 1,762,388,311.29 242, 186. 11 17.0 United States bonds 754,744,891.34 103,716.49 7.3 State, county, and municipal bonds 176,284,278. 64 24,224. 86 1.7 Railroad bonds 361,221,071.31 49, 638. 73 3.5 Bonds of other public-service corporations 182, 297,622.00 25,051.21 1.8 Other bonds, stocks, warrants, etc 287,840,448.00 39,554.82 2.8 Banking house, furniture, and fixtures 228,840,419. 09 31,447.08 2.2 Other real estate owned 24, 168, 885. 00 3,321.27 .2 Due from banks 1,376, 785,821.33 189,196. 90 13.3 Cheeks and other cash items 31,155,316. 27 4,281.34 .3 Exchange for clearing 286,321,804. 73 39, 346. 13 2.8 Actual cash on hand, total 998,061,441.05 137,152. 87 9.6 Gold coin 153,411,301.23 21,081.67 1.5 Gold certificates 434,354,210. 00 59, 688. 64 4.2 Silver dollars 14,418,204.00 1,981.34 .1 Silver certificates 140, 277,909.00 19,276.89 1.4 Subsidiary and minor coins 21,789,060. 82 2,994. 24 .2 Legal-tender notes 185,219,602. 00 25,452. 74 1.8 National-bank notes 48,591,154.00 6, 677. 36 .5 Other resources 41,090,650.76 5, 646. 65 .4 Total resources 10,383,048,694. 31 1,426,830. 93 100.0 22 KURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. Resources of the different classes of financial institutions in the United States and in Wisconsin — Continued . UNITED STATES— Continued. State banks (number of institutions, 12,864). Loans, discounts, and overdrafts, total Secured by real estate (including mortgage owned). . . Secured by collateral other than real estate All other loans Overdrafts Bonds, securities, etc., including premiums thereon, total. United States bonds State, county, and municipal bonds Railroad bonds Bonds of other public-service corporations Other bonds, stocks, warrants, etc Banking house, furniture, and fixtures Other real estate owned Due from banks Checks and other cash items Exchanges for clearing Actual cash on hand, total Gold coin Gold certificates Silver dollars Silver certificates Subsidiary and minor coins Legal-tender notes National-bank notes Cash not classified Other resources Total resources Loans, discounts, and overdrafts, total Secured by real estate (including mortgage-owned) Secured by collateral other than real estate .\11 other loans Bonds, securities, etc., including premiums thereon, total. . United States bonds State, county, and municipal bonds Railroad bonds Bonds of other public-service corporations Other bonds, stocks, warrants, etc Banking house, furniture, and fixtures Other real estate owned Due from banks Checks and other cash items Exchanges for clearing Actual cash on hand, total Gold coin : Gold certificates Silver dollars Silver certificates Subsidiary and minor coins Legal-tender notes National-bank notes Cash not classified Resources. Average per Per cent institution. of total. $2, 439, 414, 667. 62 8189,631.12 65.1 489,660,852. 27 38,064. 43 13.1 606,377,489.15 47, 137. 55 16.2 1,311,054,107.83 101,916. 52 35.0 32,322,218. 37 2,512. 61 .9 315,550,863.85 24,529. 76 8.4 2, 848,777. 50 221.45 .1 55, 096,142.18 4,282.97 1.5 75,753,959. 38 5,888.83 2.0 52,742,087.88 4,099. 98 1.4 129,109,896. 91 10,036. 53 3.4 112, 390,230.08 8,736.80 3.0 22,725, 359. 65 1,766.59 .6 525,822,785.89 40,875.53 14.0 16,591,367.13 1,289. 75 .4 61,263,978. 55 4, 762. 44 1.6 236,662,497. 38 18,397.27 6.3 46,341,295. 47 3,602.40 1.2 45,338,470.00 3, 524. 45 1.2 7,746,153.00 602.16 .2 26,588,194.00 2, 0()6. 87 .7 8,342,939.36 648. 55 .2 34,253,423.00 2, 662. 73 .9 25,600,890.00 1,990.12 .7 42,451,132. 55 3,299. 99 1.1 17,364, 546. 20 1,349. 86 .5 3, 747,786, 296. 35 291,339.11 100.0 Mutual savings banks (number of institu- tions, 635). Resources. Average per institution. Per cent of total. 81,809, 680, 21 4. 95 82,849,890.10 48.1 1,602,646,798.55 2,523,8.53.23 42.6 134, 202, 870. 38 211,. 343. 10 3.6 72, 830, 546. 02 114,693.77 1.9 1,715,516,716.41 2, 701,601.12 45.6 12,214,847.52 19,2.35. 98 .3 7.53, 893, 273.. 30 1,187, 233. .50 20.0 781,581,839.63 1,230,837.54 20.8 92, 445, 197. 09 145,582. 99 2.5 75,381,558.87 118,711.12 2.0 .36, .398, 553. .37 .57,320.56 1.0 9,073,933.71 14,289.66 .2 1.54, 773,. 302. 26 243,737.48 4.1 929,385.76 1,463.60 0) 94, 169. 29 148.30 (1) 15,791,('>46.85 24,868.74 .4 2,784,666.39 1 4, 385. .30 .1 3,3.57,680.00 5, 287. 69 .1 182,757.00 287. 81 (G 905.683.00 1,426.27 0 ) 143,151.71 225.44 (') 1,918,0.34.00 3,020.53 .1 3,318,778.00 J 5. 226. 42 .1 3,180,896.75 5,009.29 . 1 20.143,703.01 1 31,722.37 . 5 3,762,401,625.61 5,925,041.93 100.0 Other resources 'Potal resources 1 T/ess than one-tenth of 1 per cent. RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 23 Resources of the different classes of financial institutions in the United States and in W isconsin — Continued . UNITED STATES— Continued. Resources. Average per institution. Per cent of total. Loans, discounts, and overdrafts, total $605,591,964.03 $484,861.46 68.1 Secured by real estate (including mortgages owned).. . 361,260,042. 96 289,239.43 40.6 Secured by collateral other than real estate 71,709,510. 39 57,413. 54 8.1 All other loans 171,026,594. 35 136, 930. 82 19.2 Overdrafts 1,595,816. 33 1,277. 68 .2 Bonds, securities, etc., including premiums thereon, total. 133,752,180. 46 107,087.41 15.0 United States bonds 1,011,686.58 810. 00 .1 State, county, and municipal bonds 26,033,963.50 20, 843. 85 2.9 Railroad bonds 11,417,093. 70 9, 140. 99 1.3 Bonds of other public-service corporations 8, 694, 777. 88 6,961.39 1.0 Other bonds, stocks, warrants, etc 86,594,658.80 69, 331. 19 9.7 Banking house, furniture and fixtures 24,937,732. 28 19,966. 16 2.8 Other real estate owned 5,456,431.46 4,368. 64 .6 Due from banks 87,616,131.20 70,149.02 9.8 Checks and other cash items 1,559,685.24 1,248.75 .2 Exchanges for clearing 1,969,572.17 1,576.92 .2 Actual cash on hand, total 26,616,689.93 21,310.40 3.0 Gold coin 12,899,725.78 10,328. 04 1.4 Gold certificates 1,516,110.00 1,213. 86 .2 Silver dollars 699, 767. 00 560. 26 .1 Silver certificates 1,003,642.00 803.56 .1 Subsidiarv and minor coins 725,216. 42 580. 64 .1 Legal-tender notes 4, 623, 408. 00 3, 701. 69 .5 National-bank notes 1, 904, 792. 00 1,525.05 .2 Cash not classified 3,244,028.73 2,597.30 .4 Other resources 2,411,290.24 1,930.58 .3 Total resources 889,911,677.01 712,499.34 100.0 Stock savings banks (number of institutions, 1,249). Items. Loan and trust companies (number of institutions, 1,251). Resources. Average per institution. Per cent of total. $2,429, 421,081.30 $1,941,983.28 52.1 467,531,456. 44 1,289,452, 721.54 668,6.50,649. 78 3,786,253. 54 373,726.18 1,030, 737. .59 534,492. 93 3,026. 58 10.0 27.6 14.3 .1 1,114,778,687.06 891,110. 06 23.9 2,224,692. 43 187,123,910.87 371,707,846. 78 212, 593,716. 76 341,128, 520. 22 1,778. 33 149,579. 47 297,128. 57 169,939.02 272,684. 67 8.0 4.6 7.3 111,480,132.70 31,600,970. 01 617,605,590.28 8,058,125. 67 13,705,610.71 89,112. 82 25,260. 57 493, 689. 52 6, 441.35 10,955. 72 2.4 .7 13.2 .2 .3 269,825,566.23 215,687.90 5.8 16,203,972.08 1.38,557,100. 00 1,578,972.00 25.273.690.00 3, .540, 249. 15 21.664.308.00 24,854, 740. 00 38.152.535.00 12,952. 82 110,757. 07 1,262.17 20,202. 79 2,829. 94 17,317. 59 19,867.90 30,497.63 .3 3.0 0) .5 .1 .5 .5 .8 68,635,104.75 54,864.19 1.5 4, 665,110,868.71 3,729,105. 42 100.0 Loans, discounts, and overdrafts, total Secured by real estate (including mortgage owned). . Secured by collateral other than real estate All other loans Overdrafts Bonds, securities, etc., including premiums thereon, total. United States bonds State, county, and municipal bonds Railroad bonds Bonds of other public-service corporations . Other bonds, stocks, warrants, etc Banking house, furniture, and fixtures Other real estate owned Due from banks Checks and other cash items Exchanges for clearing Actual cash on hand, total Gold coin Gold certificates Silver dollars ] . ’ Silver certificates ” i Subsidiary and minor coins Legal-tender notes National-banknotes Cash not classified !! ! ! X ! ! ! Other resources Total resources • Less than one-tenth of 1 per cent. 24 KUEAL CREDIT OR FARM FINANCE IN THE UNITED STATES, Resources of the different classes of financial institutions in the United States and in Wisconsin — Continued . UNITED STATES— Continued. Private banks (1,116). Items. Resources. Average per institution. Per cent of total. *128,045,872.21 *114,736.44 70.0 Secured by real estate (including mortgage owned)... 37, 536, 422. 83 16,316, 121.. 32 71,559,680.21 33,6.34. 79 14, 620. 18 64, 121. 58 2,359.90 20.5 8.9 38. 1 2,633,647.85 1.4 Bonds, securities, etc., including premiums thereon, total. . 9, 869, 645. 22 8,843.77 .5.4 United States bonds 410,282.47 2,466,506.72 488,547.28 1,418, .865. 04 5,125,443.71 367. 64 .2 State, county, and municipal bonds 2,210.13 461.92 1.3 Railroad bonds .2 Bonds of other public-service corporations 1,271.38 4, 592. 69 .8 Other bonds, stocks, warrants, etc 2.8 Banking house, furniture, and fixtures 4,766,982.16 4. 854, ,368. 27 26,168,941.51 817,722.72 4,271.49 2.6 Other real estate owned 4, 349. 79 2.7 Due from banks . 23. 448. 87 14.3 Checks and other cash items 732. 73 .4 Exchange,.'? for clearing 221,775. 82 198. 72 .1 Actual ca.sh on band total 7, 189, 327. 84 6, 442. 05 3.9 Gold coin 1,201,415.08 459. 730. 00 297. 282. 00 425.728.00 311,955. 37 1,076.54 411.94 . 7 Gold certificates .3 Silver dollars . . 266. 38 .2 Silver certificates . . 381. 48 .2 Subsidiarv and minor coins 279. .53 • 2 T/ega,l-tender notes 655, 952. 00 587. 77 !4 National-hank notes 976,562.00 2,860,703.39 875. 06 . 5 Cash not cla'?sified 2,563.35 1.6 Other resources 889,584.93 797. 12 .5 Total resources 182, 824, 220. 68 163, 820. 98 100.0 WISCONSIN. Items. National banks (number of institutions, 128). Resources. Average per institution. Per cent of total. Loans, discounts, and overdrafts, total Secured by real estate (including mortgage owned) . . . Secured by collateral other than real estate All other loans .*102,859,737. 73 *803,591.70 56.8 1,285,816.20 25,569,239.17 75,642,724.51 361,957.85 10,045.44 199,759.68 590,958.79 2,827.80 .7 14.1 41.8 .2 Overdrafts . . Bonds, securities, etc., including premiums thereon, total. . United States bonds State, county, and municipal bonds Railroad bonds 35,890,714.71 280,396. 21 19.8 13,400,423.80 6,067,775.26 5,387,770.65 5.071.746.00 5.962.999.00 104,690.81 47, 404. 49 42,091.96 39,623.02 46, 585. 93 7.4 3.4 3.0 2.8 3.3 Bonds of other public-service corporations Other bonds, stocks, warrants, etc Banking house, furniture, and fixtures Other real estate owned Due from banks 2,962,209.21 347,890.57 24,505,644.56 373,051.51 829,643.85 23,142.26 2,717.90 191,450.35 2,914.46 6,481.59 1.6 .2 13. 5 .2 . 5 Checks and other cash items Exchanges for clearing Actual cash on hand, total Gold coin 12,524,846.80 97,850.37 6.9 2,448,509.90 3.724.610.00 251.705.00 1.865.632.00 310,473.90 3.122.633.00 801.283.00 19,128.98 29,098.52 1,966.45 14,575.25 2,425.58 24,395.57 6, 260. 02 1.4 2.1 .1 1.0 .2 1.7 .4 Gold certificates Silver dollars Silver certificates Subsidiary and minor coins Legal-tender notes National-bank notes Other resources 656,814.20 5,131.36 .4 Total resources 180,950,553.14 1,413.676. 20 100.0 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. 25 Resources of the different classes of financial institutions in the United States and in Wisconsin — Continued . WISCONSIN— Continued. State banks (number of institutions, 517). Items. Resources. Average per institution. Per cent of total. Loans, discounts, and overdrafts, total $101,025, 128. 64 $195, 406. 44 70.0 Secured by real estate (including mortgage owned) — 32,547, 729. 43 62,954.99 22.6 Secured by collateral other than real estate 17,040, 166.73 32,959.70 11.8 All other loans 50, 726,570. 31 98,117.16 35.1 Overdrafts 710,662.17 1,374.59 .5 Bonds, securities, etc., including premiums thereon, total. . 14,035,386.82 27, 147. 75 9.7 United States bonds 249, 700. 00 482. 98 .2 State, county, and municipal bonds 3, 122,114.30 6,038.91 2.2 Railroad bonds 2,816,208. 52 5,447.21 2.0 Bonds of other public-service corporations 3,592,712. 23 6,949. 15 2.5 Other bonds, stocks, warrants, etc 4,254,651.77 8,229. 50 2.9 Banking house, furniture, and fixtures 3,200,487.89 6, 190.50 2.2 Other real estate owned 353, 738. 67 684. 21 .2 Due from banks 19,024,855.80 36, 798. 56 13.2 Checks and other cash items 423, 762. 59 819. 66 .3 Exchanges for clearing 304,031.33 588. 07 .2 Actual cash on hand, total 5,938,247.06 11,485.97 4.1 Gold coin 1,631,820. 00 3,156.32 1.1 Gold certificates 556, 910. 00 1,077.20 .4 Silver dollars 283,463.00 548. 28 .2 Silver certificates 399,257. 00 772. 26 .3 Subsidiarv and minor coins 276,317.49 534. 46 .2 Legal-tender notes 449, 749. 00 869.92 .3 National-bank notes 932,054.00 1,802. 81 .6 Cash not classified 1,408,676. 57 2, 724. 71 1.0 Other resources 21,238.58 41.08 (1) Total resources 144,326,877.39 279, 162. 24 100.0 Mutual savings banks (number of institu- ' tions, 3). Average per Per cent AVC-OWLil L/Co« institution. of total. Loans, discounts, and overdrafts, total $1,025,233.59 $341, 744. 53 61.2 Secured by real estate (including mortgage owned). . . 937, 834.51 312,611.50 56.0 Secured by collateral other than real estate 87,399.08 29, 133.03 5.2 Bonds, securities, etc., including premiums thereon, total. 492, 771.21 164,257. 07 29.4 State, county, and municipal bonds 339,040.81 113,013.60 20.2 Railroad bonds 45, 163. 74 15,054. 58 2.7 Other bonds, stocks, warrants, etc 108,566.66 36, 188. 89 6.5 Banking house, furniture and fixtures 19,523.20 6, 507. 73 1.2 Due from banks 117,381.30 39, 127. 10 7.0 Checks and other cash items 11,332.32 3, 777. 44 .7 Actual cash on hand, total 8,210.95 2, 736.98 .5 Gold coin 1, 200.00 400.00 .1 Gold certificates 1, 050. 00 350. 00 .1 Silver dollars 149. 00 49. 67 (‘) Silver certificates 1, 708. 00 569.33 .1 Subsidiary and minor coins 517.95 172. 65 0) Legal-tender notes 1,438.00 479.33 .1 National-bank notes 2, 148. 00 716. 00 .1 Total resources 1,674, 452. 57 558, 150. 86 100. 0 1 Less than one-tenth of 1 per cent, 26 RURAL CREDIT OR FARM FINANCE IN THE UNITED STATES. Resources of the different classes of financial institutions in the United States and in Wisconsin — Continued . WISCONSIN— Continued. Items. Stock savings banks (number of institutions, 13). Resources. Average per institution. Per cent 1 of total. *11,318,514.45 *870, 654. 96 55.9 1,273,695.11 97, 976. 55 6.3 339, 943. 66 26,149.51 1 1.7 9, 650, 054. 17 742,311.86 47.7 54,821.51 4,217. 04 .3 3,833.988.64 294, 922. 20 18.9 4,500.00 346. 15 (‘) 3,004,853.16 231,142. 55 14.8 154, 000. 00 11,846. 15 .8 525,935.99 40, 456. 61 : 2.6 144, 699. 49 11,130.73 .7 433, 450. 90 34, 111.61 2.2 86, 247. 71 6, 6:34. 44 .4 3,377,735.00 259,825.77 , 16.7 82,541.39 6, 349. 34 I .4 181,296.55 13, 945. 89 ‘ .9 916, 127. 90 70, 471. 38 4. 5 269, 199. 50 20, 707. 65 1.3 5,880. 00 452.31 (*) 11,233.00 864. 08 . 1 6, 754. 00 519.54 (') 61,749.01 4, 749. 92 .3 147, 487. 00 11,. 345. 15 . 7 32, 494. 00 2, 499. 54 .2 381,331.39 29,333. 18 1.9 5,370. 73 413. 13 0) 20,245,273. 27 1,557,328.71 100.0 Loan and trust companies (number of insti- tutions, 11). Resources . Average per Per cent institution. of total. *6,799,442.54 •1618, 131. 14 61.6 4,247,894.87 386, 172. 26 38.5 1,901,358. 24 172,850. 75 17.2 595,402. 61 54, 127. 51 5.4 54,786. 82 4,980. 62 . 5 .i, 065, 008. 44 187,728.04 18.7 35, 100. 00 3, 190. 91 .3 135, 667. 98 12, 333. 45 1.2 527, 609. 46 47,964. 50 4.8 1,R6,382. 74 107,852. 98 10.7 180,248. 26 16,386.21 1.6 120,848. 95 10,986.27 1. 1 4, 893. 92 444. 90 Q) 1,610,812.09 146,437. 46 14.6 74,402. 75 6, 763. 89 7 2, 474. 18 225. 93 (‘) 66, 675. 20 6,061.38 .6 10, 440. 00 949.09 . 1 5, 830. 00 530. 00 . 1 1,394. 00 125. 73 (*) 4,961.00 451.00 1 G) 754. 82 68.62 (G 3,295.00 299. 55 (>) 6, 090. 00 553. 64 . 1 33,910. 38 3,082.76 .3 294, 682. 16 26,789.29 ■ 2. 7 11,039,240.23 1,003,567. 29 100.0 Loans, discounts, and overdrafts, total. Secured by real estate (including mortgage owned). . Secured by collateral other than real estate All other loans Overdrafts. Bonds, securities, etc., including premiums thereon, total United States bonds State, county, and municipal bonds Railroad bonds Bonds of other public service corporations Other bonds, stocks, warrants, etc Banking house, furniture, and fixtures. Other real estate owned .*. Due from banks Checks and other cash items Exchanges for clearing Actual cash on hand, total Gold coin Gold certificates Silver dollars Silver certificates Subsidiary and minor coins. Legal- tender notes National-bank notes Cash not classified Other resources Total resources . Items. Loans, discounts, and overdrafts, total Secured by real estate (including mortgage oAraed) Secured by collateral other than real esl ate All o1 her loans Overdrafts Bonds, securities, etc., including premiums thereon, total. United States bonds State, count j', and municipal bonds Railroad bonds Bonds of other public-service corporations Other bonds, stocks, warrants, etc Banking house, furniture, and fixtures Other real estate owned Due from banks Checks and other cash items Exchanges and clearings Actual cash on hand, total Gold coin Gold certificates Silver dollars Silver certificates . . ! , Subsidiary and minor coins Legal-tender notes National-bank notes Cash not classified Other resources Total resources I liOss than one-tenth of 1 per cent. O