for. If it is approved, the information is, as far as possible, verified on the ground by their own examiner. The title to the property is then examined by their attorneys. If found perfect, papers for signature and amount agreed upon as a safe loan are sent to their agent for the final settlement, and the mortgage is recorded at the county seat. The complete papers are then assembled and, after proper record is made, are given a mortgage number and become a part of the investment. The papers in a mortgage envelope consist of note and mortgage, assignment of mortgage, abstract of title, insurance policy, if any, application and examiner's report. The mortgage company guarantees each title.

The mortgage company not only makes a careful investigation of the quality of the mortgage, but during the period of investigation it assumes the entire management of the loan. A record is kept which enables the company to ascertain whether the farmer's taxes and insurance premiums are promptly paid, and to collect his interest, as well as the principal sum, when due. This provision is made without expense to the owner of the mortgage, and the company's profit, moreover, is paid by the borrower.

Two illustrations of the mortgages offered by this concern will show the quality of the security which is furnished. The names are fictitious:

$2,000

JAMES W. BROWN

County, North Dakota. This mortgage is dated December 1, 1910, and is due December 1, 1915. The loan is secured upon N. E. 1⁄4 30-133-62, 140 acres under cultivation and 20 acres fenced to pasture. It is otherwise improved by a set of buildings costing $1,200 or $1,300, carrying insurance for $800. The borrower has stock and machinery sufficient to run his farm, and is worth about $3,000 all clear of encumbrances. The soil is a rich, heavy black loam, with clay sub-soil. This quarter, I think, would readily sell at $45 or $50 an acre. The land is situated about 51⁄2 miles from

and the loan is being made to pay a loan now on the land.

C. F. EVERHARDT

$4,500

County.

This mortgage is secured upon 280 acres of land about five miles north and west from The borrower is a German, and has resided here more than twenty years. 160 acres of the land are now under cultivation and the balance fenced to pasture. It is otherwise improved by buildings costing $2,500. I do not believe that the land could be bought for less than $50 an acre. It is a loan that I can recommend in the highest terms.

Loans made on this character of security are not open to question. When the broker is reliableand the investor can usually ascertain this fact through his local bank-so that his statements can

be relied upon, an investment in a farm mortgage is as safe as an investment in any other form of security. The farm-mortgage investor has the advantage of a high-interest rate, and, if this is an object to him, an early maturity of his loan. Against this higher rate must be balanced the slower market and the greater difficulty in borrowing on the mortgage, as compared with a mortgage bond of first quality.

XVII

THE MORTGAGE BANK

PRODUCTIVE land furnishes the ultimate security for the investor. Outside of the mining industry, which contributes but little to the supply of investment securities, all other forms of investment rest directly or indirectly upon the farms. Railway traffic mainly comes from the farms. The farms furnish most of the raw material of manufacture. As yet, however, there has been little realization of the farms themselves as a basis of investment. The railroads of the United States are worth, in round numbers, $20,000,000,000. This entire value is outstanding in the hands of the investors in the form of stocks and bonds. The amount of securities issued by industrial corporations is probably greater than the value of the property which these companies own. Public-service corporations are fully represented by investment securities. It is only in the field of real estate, however, and particularly farm real estate, that investments still lag far behind value.

According to the census, there are in the United

States 6,361,502 farms, containing a total of 878,798,000 acres. The total value of this farm property is estimated at $40,991,000,000, of which over two-thirds represents the value of the land, one-sixth the value of the buildings, and one-sixth the combined value of the improvements, machinery, and live stock. The total value of this farm property has more than doubled during the decade 1900 to 1910. The increase in farm land alone has been 118.1 per cent. The average value per acre of the American farm increased from $15.57 in 1900, to $32.40 in 1910. The explanation of this phenomenal increase in land values is found in the fact that while the total population increased 21 per cent. since 1900, the urban population increased 34.8 per cent. and the rural population only 11.2 per cent. The number and acreage of farms increased much less rapidly than the total population. The value of farm products, as a consequence of this steadily growing demand from cities and towns for food supply, has been rapidly advancing, and has made agriculture easily a most profitable business.

This great industry, however, is but little known to the investor. The savings banks and insurance companies, and, to a less extent, the commercial banks and trust companies, have realized the