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 The Land bank of the state of New York; a 
 
 3 1924 013 989 334 
 
 
 DATE 
 
 DUE 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 GAVLOHD 
 
 
 
 PRINTED IN U.S-A 
 
« 
 
 fT eland Bank 
 
 qfthe , 
 
 ite of New York 
 
 A co-operative system to \jj^J\J 
 
 M 
 
 l! ^-^nance real estate mort' 
 
 ^ gages for long terms and ^ ff7 
 to amortize the debt by . ^ 
 small annual payments, 
 with the privilege of full 
 liquidation at any time. 
 
 By 
 
 John J. Dillon 
 
 ^ fe 
 
 s 
 
 7 
 
 Published by 
 
 fhe Rural New-Yorker 
 
 333 West 30th Street 
 New York 
 
Cornell University 
 Library 
 
 The original of tlnis bool< is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924013989334 
 
LAND BANK 
 
 OF THE 
 
 STATE OF NEW YORK 
 
 SYSTEM OF MORTGAGE CREDITS 
 EXPLAINED 
 
 LOCAL AND CENTRAL ASSOCIATIONS.— The 
 system of mortgage credits adopted for New York 
 ' State provides for local associations aU over the State 
 without ■ limit as to number, and one central associa- 
 tion, called the Land Bank of the State of New York. 
 Any person, man, woman or child, may be a meinber 
 of the local association ; but, of course, only land own- 
 ers may borrow money from it on mortgage. Members 
 not land owners may borrow Only on the shares held 
 by themselves in the local association. Th^se local 
 land banks will be the saving and' loan associations 
 now existing and those yet to be formed in the State. 
 These saving and loan associations have been adopted 
 as the local organizations because the excellent law . 
 under which they are authorized already exists. They 
 are strictly cooperative, and have been universally suc- 
 cessful. 
 
 A DISTINCTION IN ASSOCIATIONS.— These lo- 
 cal saving and loan associations must not be confound- 
 ed with the so-called National savings and loan asso- 
 ciations, which were not cooperative and which can 
 no longer be organized in the State of New York. 
 
 THE LAND BANK.— The local savings and loan 
 associations will own and control the Land Bank of 
 the State of New York. 
 
 FORMATION OF ASSOCIATIONS.— A savings and 
 loan association may be formed anywhere in the State 
 by 15 persons, either men or women. It can operate 
 only in the territory embraced in a radius of DO miles. 
 The 15 organizers should all live within this territory ; 
 but if 15 people cannot be found in the territory, a 
 smaller number will do, provided enough people to 
 make up the necessary 15 will assist them from the 
 outside. It is, however, desirable that the whole 15 
 organizers live in the community in which the society 
 is to operate, and these can usually be found within 
 a radius of 50 miles. Usually the associations confine 
 themselves to much smaller territory. One local asso- 
 ciation will be sufficient for any particular neighbor- 
 hood ; but there is no restriction on the number of 
 local savings and loan associations that may be organ- 
 ized in the same place. 
 
 THE FIRST STEP.— When 15 persons have sig- 
 nified their intentions to become members of a savings 
 and loan association, a meeting should be called. It 
 is a good plan to have a subscription paper prepared, 
 and have those who favor the organization sign it, 
 and set down the number of shares he wishes to take, 
 and if this is not done previous to the meeting, then 
 it may be done at the meeting. 
 
EXPERT AID. — It is desirable that a public-spirit- 
 ed and reliable lawyer should be one of the organizers, 
 if one lives in the neighborhood. If there be a bank in 
 the district it is most desirable that one of the officers 
 or a principal employee of the bank shall be among 
 the number, and that a leading citizen of the com- 
 munity in sympathy with the movement and command- 
 ing the respect of his neighbors shall also be among 
 the 15 incorporators. It would be well, of course, to 
 invite a representative from some neighboring savings 
 and loan association to attend the meeting and give 
 some practical advice, which is really more essential 
 than the legal counsel. 
 
 LEGAL REQUIREMENTS.— Before holding the 
 meeting, the men who are moving in this matter should 
 write the Superintendent of Banks, Albany, N. Y., 
 and get from him a copy of the law, which is self- 
 explanatory in regard to organization and is direct in 
 its terms. With a copy of the law before them, the 
 organizers would draw up an organization certificate 
 making gnd executing three copies, one of which they 
 would hold themselves and send the other two to the 
 Superintendent of Banks. 
 
 PROPER FORMS.— There are two forms of organ- 
 ization permitted by the law. These are known as : 
 (1) The "permanent plan," and (2) the "serial plan." 
 The organizers should be careful to avoid the "serial 
 plan" and adopt the "permanent plan," which is a 
 system of coBperation between borrowers and lenders ; 
 and which has been adopted by practically all the pro- 
 gressive organizations of the State. 
 
 CERTIFICATE AND BY-LAWS.— Before doing 
 any business or receiving any money, however, it would 
 be necessary to forward the organization certificate, 
 together with by-laws also acknowledged by the in- 
 corporators, to the Superintendent of Banks. A copy 
 of the necessary by-laws for the associations can be 
 had from the Banking Department, from the New York 
 State League of Savings and Loan Associations, or 
 from the office of The Rtjkal Nbw-Yokker. Changes 
 may be made in these by-laws within the law to suit 
 local conditions and preferences. 
 
 PASSING INSPECTION.— Before executing the or- 
 ganization certificate and the by-laws, it would be well 
 to submit those by-laws for review to the Banking De- 
 partment, so that when the certificate and the proposed 
 by-laws are forwarded to the Superintendent of Banks 
 there will be very little doubt but that they will pass 
 inspection there. It is in this respect that the advice 
 of an experienced association advisor is desirable. The 
 State will furnish instructors, and organizers for the 
 present, and at any time arrangements may be made 
 for a competent advisor on application to The Rubai 
 Nbw-Yoekee. The banking department will not only 
 pass upon the papers submitted to it, but will make 
 an inquiry into the character and standing in the com- 
 munity of the persons who are organizing the associa- 
 tion, and will not issue a certificate of authorization 
 unless it is satisfied in this respect. 
 
 The by-laws should contain a clause that the new 
 association will become affiliated with the Land Bank, 
 this privilege being one that every association in the 
 ■ State decides for itself. 
 
 2 
 
PREPARING FOR BUSINESS.— When the Super- 
 intendent of Banks has issued a certificate of authority 
 and approved the by-laws, the association is then ready 
 for business, and the first payment on shares is due. 
 These payments are usually called dues. None of this 
 money, which is called capital, can be paid out for ex- 
 penses ; and for this reason some associations think it 
 well to require each member to pay an initial fee of 
 from 25 cents to one dollar as required to pay organi- 
 zation expenses. In other cases, the necessary ex- 
 penses are advanced by one or more of the members, 
 and this is repaid later out of the earnings. . 
 
 HANDLING CAPITAL.— The amount to be paid 
 on shares may be arranged under the provisions of the 
 law to suit local conditions and desires of members. 
 Arrangements may be made to have "dues" paid weekly, 
 monthly, or annually. The shares on loans may be 
 made to mature at any time from 10 to 40 years. In- 
 stallment shares in a savings and loan association are 
 not paid up in full in one or two payments, as shares 
 are paid in a business corporation. Heretofore the 
 dues have usually been paid monthly, and the plan has 
 been to mature them in about 10 to 12 years. On this 
 plan a member subscribes for one share that will be 
 worth $100 when it matures or "runs out." He pays 
 50 cents monthly or $6 per year. If loans are made 
 at six per cent, interest, the shares will mature in a 
 little less than 12 years. The member will have paid 
 in in monthly cash installments a total of nearly $70. 
 The profits are added yearly to his credits and he 
 draws out $100, or the face value of his share. If he 
 is a borrower, he must take one share for every $100 
 borrowed, and besides paying his regular installments 
 he must also pay the annual interest on the loan. 
 These monthly methods of payment have been popular 
 in towns and cities where the members have a steady 
 salary income. It was desirable to make the payments 
 large enough to mature the shares or liquidate the 
 mortgage in about 10 to 12 years. 
 
 METHt)D OF PAYMENT. — With the advantages 
 of the Land Bank to furnish cash as needed, there 
 will not be the need of large payments nor of maturity 
 of stock or liquidation of mortgages in so short a 
 time. With farmers the monthly payments might in 
 some cases be embarrassing, so under the new plans, 
 payments will probably be made quarterly or semi- 
 annually, and the shares and mortgages will mature 
 any time short of 40 years. To do this the annual pay: 
 ments will be only one per cent, of the principal in ad- 
 dition to the interest. If the interest rate at the Land 
 Bank is 4% per cent, annually, then a y-early payment 
 of 5% per cent, of the loan will leave the farm free 
 and clear in about 40 years. Of course, any or all of 
 the mortgage may be paid at any time, and the pay- 
 ments reduced accordingly ; but the payment cannot 
 be demanded until the mortgage matures, provided the 
 payments are made regularly. Of course, the same 
 advantage accrues to the member who does not bor- 
 row. He or she makes the payments regularly. The 
 amount to his or her credit including the profits from 
 year to year, may be all withdrawn at any time. IE 
 the payments are continued to maturity, the face of 
 the shares is all withdrawn at one time. 
 
MEMBERSHIP. — Members of a savings and loan 
 association are tliose persons to whom shares have 
 been issued or transferred. Guardians holding shares 
 for others have all the privileges of members except the 
 right to vote. Juvenile shares may be issued to minors 
 and dividends paid on same, but the owners of such 
 shares do not have the right to vote. Members of sav- 
 ings and loan associations are divided into three quite 
 distinct classes. 
 
 First we have persons who have a steady income who 
 have no wish to borrow, but who wish to save a definite 
 portion of their earnings as it comes in. When they 
 subscribe for installment shares they provide to make 
 regular payments at definite times. They have an ab- 
 solutely safe investment and the money begins to draw 
 profit as soon as deposited. The enforced payments en- 
 courage saving and thrift. In this class of members we 
 always have a number of public-spirited men and women 
 who are infiuenced neither by the profit or the privileges 
 of making a loan, but who take shares and membership 
 because they wish to be identified with a worthy pub- 
 lic enterprise and desire to encourage it. They also 
 find the investment safe and the profit satisfactory. 
 
 Second, we have persons with a small but steady in- 
 come, such as clerks, farm hands and renters, who have 
 an ambition to own a home or a farm, but who have 
 not enough saved to make the first payment. These 
 persons accumulate steadily on installment shares. 
 Their saving is safe, and every dollar is earning profits 
 as soon as paid in. When they have enough saved up 
 to make the first payment on a home or farm, they have 
 established a reputation for sobriety and thrift, and 
 the association is willing to take a mortgage for the 
 balance of the purchase money. 
 
 'Third, we have the man who has enough money to 
 make the first payment on a home or farm ; or who 
 already owns a place and wants to improve it with 
 buildings, fences, drainage or otherwise, and wants to 
 place a mortgage to complete the purchase price, or to 
 meet the cost of repairs. He may already have a 
 mortgage expiring, which he wishes to renew on bet- 
 ter terms. He gets the advantage of a long time loan 
 at favorable rates, and with the privilege of amortizing 
 the loan in small annual payments. 
 
 SAVING AND ACCUMULATION SHARES.— In 
 addition to the above classification, an association may, 
 if it so provides to do in its by-laws, issue "saving 
 shares" upon which payments are made from time to 
 time as the member may elect ; or it may issue "ac- 
 cumulation prepaid shares," on which a payment of 
 $50 or more is made at the time of subscription. The 
 earnings are added to this until the share matures and 
 is worth $100; or "income shares" which are paid for 
 in advance at face value at the time of subscription. 
 The dividends on these shares are paid in cash. 
 
 ADVANTAGES SHOWN.— It will be seen that 
 every opportunity is offered in these associations for the 
 accommodation of people who wish to save or invest 
 money in large or small amounts. They afford every 
 advantage of the savings bank with none of the savings 
 bank's faults. They are equally as safe. They pay a 
 better rate of income. The deposits begin to earn in- 
 come sooner on an average and there is less loss of in- 
 come from withdrawals. The money is in the control 
 
of the men who earn it and save it. They learn how 
 to use it and control it; and it is used for their own 
 business and profit. There is little or no expense in 
 the management of it. The work of the officers is 
 mainly gratuitous. With the savings banks there is a 
 heavy expense of management which comes out of the 
 earnings of the depositors. The money of the savings 
 bank is either invested in speculative building enter- 
 prises or in bonds or stocks, but it is not invested in 
 the small mortgages of the frugal people who worked 
 for it and saved it. The savings banks perform a legi- 
 timate service in safeguarding the savings of the poor, 
 but they do not compare in efficiency with the savings 
 and loan associations, either in profits on savings or in 
 loans to their own patrons. 
 
 LIMIT OF INVESTMENT.— The accumulations of 
 payments on shares, interest and amortization payments 
 on mortgages constitute the capital of the savings and 
 loan associations. They may borrow limited amounts, 
 and when they have a surplus not needed by their own 
 members, they may invest in certain standard securities, 
 but their exclusive business is to loan on first mort- 
 gages on real estate to their own members. They can 
 loan to members only or to other associations. 
 
 ADVANTAGES SHOVPN.— Heretofore the money 
 paid in by the members was all the funds available for 
 loaning to members on mortgages. If the funds were 
 short, the borrowing member simply had to wait until 
 the payments accumulated. In cities and towns where 
 there were many members who wanted to save and 
 comparatively lew borrowers, the plan worked all right; 
 but where there was more demand for loans than there 
 was money to supply them the result could not be 
 entirely satisfactory. That was the reason the sav- 
 ings and loan association could not entirely supply farm 
 needs as it was heretofore organized. Some associa- 
 tions in towns had more money than they needed for 
 their urban members. These took neighboring farmers 
 in as members, and made loans to them ; but the 
 farmers of a neighborhood could not organize an asso- 
 ciation of their own and depend on its funds to fin- 
 ance their mortgages. It would take too long to ac- 
 cumulate funds enough to go around. The need was 
 that money should be available at any and aU times 
 to take up a mortgage just when the land owner wanted 
 it. This requirement will now be supplied through 
 the Land Bank. 
 
 THE LAND BANK.— The law authorizing the or- 
 ganization of the Land Bank of the State of New York 
 was indorsed by Governor Glynn and passed both 
 branches of the Legislature in the session of 1914. It 
 was promptly signed by the Governor, and is now a 
 law, and plans are under way to organize the bank. 
 
 ITS POWERS.— This Land Bank of the State of 
 New York will be located in the city of New York. It 
 will be brgauized by the Savings and Loan Asso-. 
 ciation, and owned exclusively by them. Of course each 
 member of a Savings and Loan Association will actually 
 own his share of the Land Bank through his share of 
 the local association. No local association will be 
 obliged to become a member of the Land Bank, It may 
 become a member or not as its members prefer, but 
 just as a person must be a member of the local associa- 
 
 5 
 
tion to get a mortgage from it, so the local association 
 must be a member of the Land Bank in order to ben- 
 efit from it. The local association will become a mem- 
 ber of the Land Bank by taking one or more shares 
 In the Land Bank, and the local association will then 
 be entitled to all the benefits of the Land Bank. 
 
 THE BANK'S ORGANIZATION.— The Land Bank 
 will be organized in the following manner : When 10 or 
 more local associations signify their intention of becom- 
 ing members of the Land Bank a meeting will be held 
 of such members, a charter and by-laws will be pre- 
 pared. These will be submitted to the Superintendent 
 of Banks. He will approve them, and issue a certificate 
 of authority to open up for business. The 10 or more 
 local associations wiU then receive their certificate of 
 shares in the Land Bank, and pay in $1,000 for each 
 share. Directors and officers will then be elected and 
 the Land Bank will be ready for business. It will 
 have the money received for shares as capital to loan 
 on real estate mortgages. It will also have the auth- 
 ority under regulations of the State to sell Land Bonds. 
 These bonds will be secured by the first mortgages on 
 real estate and an officer of the State will see that 
 each bond sold is secured by such a first mortgage on 
 real estate. This provision wiU make the Land Bank 
 bonds one of the safest forms of security in the coun- 
 try, and the bonds should sell for as low a rate of in- 
 terest as most municipal or State bonds. 
 
 SUBSCRIPTIONS TO BANK SHARES.— The lo- 
 cal association now formed and doing business with 
 resources amounting to $10,000 is in a position to sub- 
 scribe for one share in the Land Bank, and pay $1,000 
 for it. New local associations will have two methods 
 open to this. They may organize and go on doing 
 business and accumulating assets until each has re- 
 sources of $10,000; and then subscribe to one share in 
 the Land Bank. In some sections this method may be 
 a little too slow for the members of the local as- 
 sociation. They may want mortgage money at once, 
 and several members may want to place mortgages at 
 once. The new association would not have the money 
 in sufficient volume to make the loans promptly. In 
 that case the mortgages could be prepared and exe- 
 cuted to the local association. These mortgages would 
 then be assigned to the Land Bank, and arrangements 
 made with it for the loan on them to the local associa- 
 tion. Of course, the one $1,000 share of stock neces- 
 sary to make the local association a member of the 
 Land Bank would have to be paid out of the proceeds, 
 until the dues of local members accumulated and the 
 borrowing member would have to take enough paid up 
 shares to cover the necessary margin of safety on his 
 loan ; but this would yet give the borrower a liberal 
 cash mortgage on his appraisal. Of course the local 
 association would use its own money first, if it had 
 ■ accumulations enough to buy the mortgage, or to pay 
 for its membership in the Land Bank, and accumulate 
 its margin of safety ; but if it were short at any time, the 
 borrowing member would execute his mortgage to his 
 own local association. The mortgage will then be as- 
 signed to the Land Bank, and placed in the custody of 
 the Comptroller of the State. The money for the mort- 
 gage would be sent from the Land Bank to the local 
 
 G 
 
association and handed over to the larmer or home- 
 owner who executed the mortgage. This may go on in- 
 definitely because the Land Banlt is authorized to sell 
 bonds as fast as the mortgages are received. The 
 amount of bonds it can sell is limited only by its capi- 
 tal and the mortgages assigned to it. 
 
 FEATURES OF THE PLAN.— It has already been 
 ■ seen that this system of mortgage credits includes two 
 'features. First, the central institution, called the Land 
 Bank, which is to gather money from outside sources 
 through the sale of its own bonds secured by mort- 
 gages, and furnish this money to the local associations 
 for the use of farmers and home owners. The other 
 feature of the system is the local organization, known 
 as the savings and loan associations. The system was 
 built up on the savings and loan association law be- 
 cause these associations are purely cooperative. They 
 are controlled and managed by the members ; and the 
 members get all the benefits. There is no profit to go 
 to anyone else ; and the administration is honest, efiB- 
 cient and economical. It would, of course, be possible 
 to organize one or more large capitalized banks in the 
 State for the purpose of loaning money on mortgages. 
 This plan was considered and may yet be adopted sup- 
 plementary to our present plan. But the cost of man- 
 aging such an institution would be considerable, and 
 naturally the capitalists who formed it would want to 
 make the best possible profits for themselves. They 
 would need to keep agents, and appraisers and collec- 
 tors, in the field all the time, travelling from place to 
 place, to look after the business, and the people who 
 secured the loans would be obliged to pay this heavy 
 expense in one way or another. It was to avoid this 
 expense of costly administration and extra profits that 
 the local association plan was a.dopted. The officers of 
 the local association are familiar with values in the 
 neighborhood. They also know the individuals who 
 wish to borrow, and so know the moral risk in the loan. 
 They are on the ground all the time to see that the 
 rules are complied with and the property kept in proper 
 repair. They are also there to make collection of in- 
 terest and payments when due. While the association 
 is young and small this work is done voluntarily by 
 the members. There is no expense ; and when the as- 
 sociation grows large and strong th? expense is trifling. 
 There is no profit to go to anyone outside of the as- 
 sociation. The members get the benefit of low rates of 
 interest on the loan, ' and if there is any profit from 
 it, he gets it back in dividends. The Land Bank en- 
 ables all the mortgage creditors of the State to mass all 
 their mortgage credits behind the Land Bank bonds, 
 making them by State supervision an attractive invest- 
 ment, and the borrowers will reap the benefit . of this 
 sound and stable security without any more responsi- 
 bility than he now incurs in placing a mortgage with 
 an individual or institution. He will get his mortgage 
 money at the rate of the Land Bank bonds plus the 
 actual, economical expense of operating the bank. For 
 the first time anywhere in this country the mortgages of 
 the small homes and farms are placed on the financial 
 basis to which their merit entitles them, and on a plane 
 equal to that of any other industrial security in the 
 whole country. 
 COST OF LOAN.— The farmer or home owner may 
 7 
 
borrow on a mortgage for 40 years or less. The rate 
 of interest will be determined by the rate of the Land 
 Bank bonds, and expense of administration. The bor- 
 rower will make an amortization payment of one per 
 cent, a year on a 40-year mortgage ; and if interest is 
 about 4.3 per cent, his annual payments will be $5.25 on 
 every hundred dollars borrowed. At the end of the 40 
 years there will be -no mortgage left. This is based 
 on the French table of annuities. So long as the 
 borrower pays his annual dues, the mortgage cannot 
 be called for payment, but the borrower has the right 
 to pay any part or all of the mortgage at any time and 
 close the account. 
 
 PLANNING FOR ASSOCIATION.— Where local 
 associations now exist it will be well for neighboring 
 farmers to become members, but before doing so it may 
 be necessary for the city and village association to 
 change its by-laws so that payments may be made quar- 
 terly, semi-annually or possibly in some places yearly. 
 If the old association for any reason does not wish to 
 change its by-laws to allow longer intervals of payment 
 then a new association may be formed in the same terri- 
 tory. The monthly system of payments may not be adapted 
 to farmers in some sections. The combination of vil- 
 lage and farm interests will undoubtedly strengthen the 
 local associations. Where new associations are formed 
 it will be well to interest both village and farming 
 classes, but where this is not practical, then the asso- 
 ciation may be formed either by residents of the city or 
 village or by farmers exclusively. 
 
 The people needimr mortgage accommodations are 
 fortunate that Governor Glynn and the Banking De- 
 partment of the State are deeply interested in the sub- 
 ject, and are vrilling and anxious to do everything pos- 
 sible to organize and develop the system. Full in- 
 structions and blanks will be supplied by the Banking 
 Department, and organizers and instructors will be 
 furnished by the State Depaj^tment of Agriculture. Of 
 course men are fortunate if they do not need a mort- 
 gage. Such citizens will not be interested for them- 
 selves. No one would suggest a mortgage for an owner 
 who does not need the money, but for those who need 
 it and must have it, no better system has yet been de- 
 vised. 
 
 SAFE INVESTMENTS.— The Land Bank bonds 
 will be a convenient and safe investment for wage 
 earners, farmers or any investor, large or small. They 
 will be written in small denominations and may be 
 bought and sold from one person to another. A per- 
 son with $20 idle may buy a Land Bank bond and it 
 will earn interest at once. When he wants the money 
 he can sell it, or if he has more money idle he can buy 
 another. This opportunity to invest in safe bonds ought 
 to absorb much of the money that now goes to get-rich- 
 quick schemes and gold-brick ventures. 
 
 AN APPEAL TO LOCAL PRIDE.— No local bank- 
 er or business man should hesitate to assist in the or- 
 ganization of a savings and loan association in his 
 town. Anything that tends to improve the conditions 
 of the neighborhood will benefit th,e local banker and 
 tradesmen. These institutions manage saving and thrift. 
 They accumulate savings and convert them through 
 the local bank into productive enterprises. They form 
 
habits of saving in the young. They encourage the 
 home instinct in the laborer and clerk. They inspire 
 the hired man to save up until he can make a first 
 payment on a farm of his own. They will keep boys 
 and girls on the farm who without thi^ incentive would 
 seek city employment; If a man or woman has a dol- 
 lar saved, the savings and loan association will keep it 
 safe and pay for the uso of it. If a member is in tem- 
 Iporary distress he can get his money back. If he has 
 real property, or if he is about to acquire it, he can 
 get a reasonable loan on terms that reduce the annual 
 payments below the normal rate of interest alone under 
 the mortgage system of the past. All citizens are 
 proud of a neighborhood where conditions like these 
 exist. All interests profit by it; and all men should 
 be proud of an opportunity to contribute to the con- 
 tentment and prosperity that such a state of affairs 
 creates in a neighborhood. 
 
 NO LONGER A SUPPLICANT.— For the first time 
 in the history of the United States the financing of the 
 farm mortgage is, under this system, put on a level 
 with large corporations, or a public utility. It puts 
 the financing of the farm mortgage on an equal footing 
 with the sale of bonds of a city or township, or of the 
 State itself. The farmer need no longer be a suppli- 
 cant at the door of the money-lender. No man can any 
 longer claim a farmer's vote or otherwise control his 
 actions on an intimation that the mortgage may other- 
 wise be foreclosed. Just as a city may bind all its 
 citizens to the payment of city bonds, and sell the com- 
 bined credit of its citizens at a lower rate of interest 
 than the individual bonds of the citizens would have to 
 pay, so the Land Bank of the State of New York may 
 sell its bonds based on the security of the accumulated 
 mortgages at a lower rate than each farmer would be 
 obliged to pay on his individual mortgage. The farmer 
 gets the benefit of this rate without incurring any ad- 
 ditional responsibility himself. Just as the municipal- ^ 
 ity or public utility corporation issues its bonds, and 
 goes into the market and sells them on their merits for 
 what they demand in the money market, so the farmer 
 or home owner through his Land Bank, will sell bonds 
 based on the combined credit of the frirm and home 
 mortgages, on terms regulated by the supply of money 
 at the time and the quality of security offered. Since 
 there is no better security anywhere the rate should 
 not exceed the interest rate on municipal or State bonds. 
 In this process the farmer and home-owner for the first 
 time liquefy and standardize their mortgage credits. By 
 this we mean he has converted his mortgage into a 
 negotiable bond and given that bond -such a stable value 
 that it will readily and conveniently pass from one 
 person to another without fear of loss by anyone, and 
 without hesitation as to its actual value. The con- 
 sciousness on the part of the owner that he is financing 
 his business on an equal footing with other business 
 men, that he is the master of the situation and not a 
 supplicant for favors, stimulates an independence of 
 action and sense of freedom that results in greater 
 business success, and in higher appreciation of citi- 
 zenship. 
 
 THE TORRENS SYSTEM.— As we begin to develop 
 this system of mortgage credits and register mortgages 
 under it, we may as well begin right, and register both 
 
farm title and farm mortgage under the Torrens Sys- 
 tem of land and title registration. This system origin- 
 ated with Sir Robert Richard Torrens in Australia in 
 1858. It has been adopted in England, Canada, South 
 America, and in some of our States, including Massa- 
 chusetts, Illinois, Indiana, Wisconsin, Michigan, Cali- 
 fornia, Colorado and possibly some other States. In 
 New York we passed a title law in 1908. Under this 
 law an official examiner makes one examination andl 
 report of the records of the property. The title is then 
 approved and registered by the Supreme Court and 
 afterward the title can never be questioned. After that 
 transfer is made by simply surrendering the old certi- 
 ficate and filing a new one at the nominal cost of two 
 dollars. No more lawyers are needed and no further 
 search of title required. There is no guarantee of title 
 required and no fear that the title will ever be ques- 
 tioned. The State guarantees the title ly its own act. 
 Lest, however, the official examiner should make an 
 oversight in the first examination for the Torrens title, 
 an "assurance fund" is provided to compensate any per- 
 son who through no negligence of his own is deprived 
 of his rightful interest in the property and this must 
 be claimed within six months of the original registra- 
 tion. This is a simple and a safe and economic method 
 of insuring title to real estate. It was opposed by 
 title insurance companies, which make enormous pro- 
 its from the insurance of titles, owners and mortgagors 
 in large cities. There is no one to oppose it in country 
 districts, and in the interests of economy, convenience 
 and safety, every association should provide in its by- 
 laws that titles in the future must be registered under 
 Article 12 of the Real Property Law as amended by 
 Chapter 627 of the Laws of 1910. This is the title of 
 the law under which the Torrens system of land titles 
 is authorized in the State of New York. 
 
 AVOID EASY CREDIT.— An easier method of se- 
 , curing money on mortgage could be provided, but this 
 system was not devised to invite the largest possible 
 risk in order to secure the corresponding greatest pos- 
 sible profit to the lender. It was devised to enable 
 an owner to sell a safe and conservative credit at 
 the lowest possible interest rate, and on the easiest 
 possible terms of repayment. It was not the purpose 
 of this particular plan to make it too easy to go into a 
 heavy mortgage debt. Every virtue may be cultivated 
 until it becomes a sin. Instead of a blessing a mortgage 
 may become a curse. Since the dawn of history one 
 set of men through cunning and device have sought to 
 profit by other men's labor. They have never found a 
 means more subtle or more suited to their purpose than 
 the instruments of credit. Away back where Roman 
 history begins to escape from the mists of allegory and 
 fable we find the astute money-lender alluring the less 
 crafty tiller of the soil into debt. We read that the 
 Roman law gave the creditor possession not only of the 
 debtor himself but also of the debtor's family. The 
 debtor may be cast into prison ; but this extreme priv- 
 ilege was seldom resorted to, for the reason that the 
 prisoner working in the fields to reduce his indebted- 
 ness was a better asset to his owner than a man in 
 jail. Within writer's memory, the company store in 
 New York State encouraged the factory operatives to 
 
 10 
 
exceed their, wages in store credit so as to control their 
 trade and their liberties better. Today in the South- 
 ern States the factor controls the cotton planters 
 through advances on loans. His purpose is to keep the 
 planters always a little in debt. If by any chance the 
 crop is sufficient to clear up the advance loan, then the 
 ingenuity of the factor is exercised to sell the planter 
 some article of luxury, such as a horse or a buggy, 
 
 I in order to beep him in debt and in the power of the 
 factor. So instead of making loans too tempting, this 
 system was surrounded with safeguards tj make it save 
 and protect the borrower by putting the control into 
 his own hands. Mortgage banks to be controlled by 
 bankers and capitalists have been proposed to finance 
 farm mortgages. We bid farmers to have a warning 
 of them. If organized at all, such banks will exist for 
 the purpose of making dividends. Provisions simple 
 enough will appear in the mortgage, but later on they 
 may have a serious meaning. The expense of conduct- 
 ing such an institution would be burdensome, and the 
 owner would pay the expense. What may be altruistic 
 at this time may turn out to be a "pound of flesh" to the 
 next generation. 
 
 Other systems than the one here mentioned may, of 
 course, be successful ; and in some situations may be 
 needed. Some earnest and sincere advocates of farm 
 credits favor a duplicate system, and this may yet 
 come. There is room for another system, but the plan 
 would need to be developed with care. It would be 
 an easy matter under the allurements of good profits to 
 accumulate money on stocks and bonds of a mortgage 
 bank to loan on farm mortgages involving unusual 
 risks and high rates of interest and expensive disburse- 
 ments. But there would be a day of reckoning, as 
 there has been with some institutions in the past. A 
 brief period of easy money would encourage speculation 
 and risk. Losses and demoralization would be the 
 inevitable result of an expensive and wasteful system. 
 To avoid this some plan of local supervision and re- 
 sponsibility must be provided in any system adopted. 
 Cooperative credits should, however, furnish all the 
 cash the individual credit will warrant on a safe basis. 
 The rules of the savings- and loan associations are 
 elastic and comprehensive. They permit considerable 
 latitude in individual requirements ; and it is believed 
 that any case of safe requirements can be accommodated 
 under them. People of small means will be invited to 
 invest their money in the bonds of the Land Bank, and 
 
 'safety was necessarily the first consideration in making 
 a law for its organization. If the law has any fault 
 it is on the side of safety. Later on it may be that ex- 
 perience will justify removing some of the restrictions 
 that safety seems on the start to demand. No man 
 unworthy of credit should hope to get it through this 
 system. It is believed that every man will be able to 
 get the portion of credit to which he is entitled. The 
 system is new and needs to be worked out and de- 
 veloped. The first step is local organization and the 
 sooner this is effected, the sooner the benefits and con- 
 veniences will materialize. 
 
 SAVINGS AND LOAN LOCATIONS.— The fol-. 
 lowing shows the location of savings and loan 
 associations ia the State by counties and post ofllces. 
 The figures following the post office indicate the number 
 
 11 
 
of associations in that city or town. For example tnere 
 are four associations in Binghamton, Broome County : 
 
 ■ COUNTY. POST OFFICB. 
 
 Albany — Albany, 15, Little Falls. 
 
 Alleghany ^ — ^Alfred. 
 
 Broome — Binghamton 4, Deposit, Gowanda. 
 • Cattaraugus—Olean, Salamanca. 
 
 Chautauqua — Jamesstown 5, Dunkirk 2, Silver Creek. 
 
 Chemung — Elmira 5. 
 
 Chena-ngo — Norwich, Oxford. 
 
 Columbia — Hudson 2, Stuyvesant Falls. 
 
 Cortland — Marathon, Cortland. 
 
 Delaware — Walton. 
 
 Dutchess — Poughkeepsie. 
 
 Erie — Buffalo 248, Springville, Tonawanda 3, West 
 Seneca, Lancaster, Hamburg, East Aurora, Depew. 
 
 Franklin — Saranac Lake, East Buffalo, Williamsville. 
 
 Fulton — Gloversville 3. 
 
 Genesee — ^Batavia 2. 
 
 Greene— Catskill 2. 
 
 Herkimer — Dolgeville, Frankfort, Herkimer, Ilion, 
 Little Falls. 
 
 Jefferson — Carthage, Clayton, Watertown 2. 
 
 Kings— Brooklyn 49. 
 
 Lewis — Lowville. 
 
 Livingston — Dansville. 
 
 Madison — Canastota, Oneida. 
 
 Monroe — Rochester 81, Brighton, Brockport, East 
 Rochester, Fairport, Gates, Irondequoit. 
 
 Nassau — Hempstead, Port Washington, Rockville 
 Centre. 
 
 New York — New York 172. 
 
 Niagara — North Tonawanda, Lockport, Nigara 
 Falls, Suspension Bridge. 
 
 Oneida— tftiea 3, Whitesboro, Rome, Oriskany Falls. 
 
 Onondaga— Syracuse 19. 
 
 Ontario — Geneva 2. 
 
 Orange — Newburgh, Port Jervis 9, Goshen, Middle- 
 town 3, Centra! Valley 2, Monroe, Wallkill. 
 
 Orleans — Medina, Albion. 
 
 Oswego — Oswego 12. 
 
 Otsego — Oneonta. 
 
 Queens — Long Island City 3, Wdodhaven, Flushing, 
 Jamaica, Whitestone. 
 
 Rensselaer — Castleton, Hoosick Falls 2, Troy 4. 
 
 Richmond — Stapleton, Mariner's Harbor 2, New 
 Brighton, Port Richmond 2, West New Brighton 3, 
 Tottenville, Tompkinsville. 
 
 Rockland — Spring Valley 3, Nyack, Pearl River, 
 Haverstraw, Suffern. 
 
 St. Lawrence — Canton, Gouverneur, Norwood, Og- 
 densburg, Potsdam. 
 
 Saratoga — Mechanicsville. 
 
 Schenectady — Schenectady 2. 
 
 Seneca — Seneca Palls. 
 
 Steuben — ^Avoca, Bath, Cohocton, Corning, Hornell 
 2, North Cohocton, Wallace, Wayland. 
 
 Suffolk — -Amityville, Babylon, Sayville. 
 
 Tioga — Waverly 2. 
 
 Tompkins — ^Freeville. 
 
 Ulster — Rondout 2, Kingston, Sangerties. 
 
 Warren — Glens Falls. 
 
 Washington — Whitehall. 
 
 Wayne — Lyons, Palmyra. 
 
 Westchester — Yonkers 2, White Plains 2, Hastings- 
 on-Hudson, Mount Vernon, Mamaroneck, New Rochelle, 
 Peekskillj Tarrytown, Tuckahoe, Williamsbridge. 
 
 Wyoming — Attica. 
 
 Yates — Penn Yan. 
 
 Farmers living in the vicinity of any of these places 
 may very readily find the officers of any of these savings 
 and loan associations. It would be well for a number 
 of farmers to send one or more delegates to confer with 
 the town association with a view of farmers becoming 
 members of the existing association. The rules are very 
 elastic, and can be made to accommodate almost any 
 requirement. If arrangements can not be effected with 
 existing associations, then farmers may form a new 
 association for themselves. 
 
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