A short time ago a prominent life insurance company submitted to the bankers and financiers of the country the following question:

"We would be greatly obliged to you if you would be good enough to let us know what rate of interest you consider as safe for a life insurance company to expect to realize on its total assets invested in such securities and mortgages as an institution of this kind should hold during the next twenty years."

A large number of replies were received, all concurring in predicting an era of cheap money. The estimates vary between two and four per cent, while 2about one hundred bankers express the opinion that an average return of from two to three and one-half per cent interest on high grade investments for the next twenty years is as high as may be expected. Samuel Carr says:

"As I look back over the last twenty years, which have certainly been full of variety for all who have had occasion to borrow or to loan money, and realize the rate which the government has paid for its money, viz., about four per cent in 1879 and 1880, down to three per cent in 1898, it seems to me that the rate for prime investments has fallen, and that whereas in 1879 or 1880 you could look forward for twenty years and expect to realize from four and three-fourths to five per cent, in 1899 you cannot look forward for the same length of time and expect to average over three and one-half or three and three-fourths per cent."

This is good news if true, as it most likely is. Capital is accumulating rapidly, and an abundance of money means cheap money.

Our farmers need cheap money as much as any other class of producers, if not more so. They will share in the benefits flowing from lower rates of interest, but not equally with the businessman or the owner of real estate in the cities. The farmer's security is good; the value of a farm is more stable than that of city real estate. But as a borrower he is at a disadvantage; he is the last to feel the effects of an improvement in the money market, and he does not always get his full share of the boom.

The cause is self-evident: it is found in our imperfect system of agricultural credits. Our banks are adapted to the wants of the business community; and city real estate offers the best field for investment of capital in large blocks in slow assets. But we lack a practical system for the gathering of small savings to be invested in farm loans. The absence of such a system accounts for the comparatively high rate of interest the farmer is compelled to pay. Even if money is abundant, it is dear to the farmer because the expenses connected with farm loans are large.

This is a serious and most important question that demands immediate attention because the prosperity of our farmers in a large measure depends upon its solution. Other lines of business have adapted themselves to the modern law of small profits; the farmer must do likewise if he is to realize any profit at all. If he is compelled to borrow money and is denied the advantage of a low rate of interest, his net earnings are likely to dwindle to little or nothing. The world is full of money; we have much at home and can draw more from other countries. But all this cheap money is of no benefit to the farmer if the money grows dear before it reaches his pocket. What is wanted is a practical system of agricultural credits, or farm banking. With such a system in operation, the farmers of the Northwest could get all the money they need at four or four and one-half per cent and on easy terms of payment; even lower rates might be obtained because their security is the best in the world.

This branch of banking is highly developed in the Scandinavian countries, and but for this fact American competition would have crushed the life out of the European farmer long ago.

Cheap easy money has enabled the Scandinavian farmer to live. With corresponding advantages of easy money, the American farmer would not only live, but thrive and prosper.

A mortgage bank organized on proper lines, having a sufficient amount of capital, and with branch offices established in all counties of the state, would go far towards supplying the needs in this field of banking. But if anything in this line is to be done within a reasonable time, the legislature must take the first step, and there is no good reason why action should not be taken by the present legislature. A joint committee made up of strong men might be appointed to investigate the matter and present the results of its work in a comprehensive report to be published, say within a year. This report should include full outlines of foreign systems of farm banking, especially those of Germany, France, Denmark, and Norway, with other useful or necessary information.

If this were done it would probably lead to definite action of some kind. The legislature may take such a step without committing itself to state ownership or state management. If possible, the plans should be made along the lines of the Landmands Bank (Farmers Bank), found both in Denmark and Norway, some of which are co-operative. The first thing to do is to set the ball in motion, and that the legislature can do; but it may not be done unless the lawmakers take the initiative. A good report could not be had for nothing, but it would be worth a great deal more than it would cost. Nor could an appropriation for such a purpose be characterized as objectionable class legislation. Every man, woman, and child in the state would, in one way or another, share in the benefits to be derived from a sensible and practical system of farm banking.

[Translator's note: I am told that this editorial started a wide discussion in the Scandinavian press. Later the American press took up this question on a national scale, the final result being that legislatures began to support the idea. State laws were passed in Minnesota, Wisconsin, and Iowa.]