maturity if the investor wishes to liquidate. This is accomplished by applying payments regularly coming in from the borrowing customers of the house, to the liquidation of such investments as may be called in by the investing clients of the house. Experience shows that voluntary repayments by borrowers far exceed the ordinary calls for repayment by investors, so that in order to liquidate ail investments thus recalled, the investment house does not need to force collection of any particular loan. The house simply pays the investor out of the funds received on voluntary repayments, and sw ches renewals, if made, to other investors.

The farm mortgage is, therefore, a liquid, short term investment, for should the investor need to realize on the investment during its term, the discount necessary to market it can, in the nature of the case, be very slight. Many houses make it a practice to repurchase loans sold through them at a discount of 1 per cent. to 2 per cent.

The farm mortgage, purchased through and cared for by a reputable farm mortgage banking house, is, therefore, practically nondepreciable and is properly inventoried at par year in and year out. It saves all the complications of amortization and revaluing, and avoids that bane of all trustees-the shrinkage of the principal.

Security of Principal

The farm mortgage negotiated by houses of proved experience and responsibility according to the methods that are now accepted as standard by such houses, may be assumed to be secured by improved farm property worth at quick sale at least double the amount invested. Granting that this is the case, there need nothing more be said to establish the pre-eminently safe character of the investment. The experience of this country, as of all foreign countries, proves that no collateral is of more certain and continuing value than farm land. Even in the days of early development of our own country, fluctuations in farm land values were temporary and the trend in value is always and inevitably upward as population increases, thus increasing the margin of security for every farm mortgage investment. This natural increase would of itself protect the investment against mistakes in appraisal or judgment in making the investment, even though the reliable houses guard themselves and their customers against such mistakes by having every security appraised by their own salaried expert appraisers.

A book could be written on the record for safety of farm mortgages and the reasons

for it, but nothing speaks better for it than the experience of so large an investor as the Union Central Life Insurance Company, of Cincinnati, which announces that in a period of 52 years they have invested $222,811,111.66 in farm mortgages, with a total loss of only 1/10 of 1 per cent.

Stability of Income

The standardized farm mortgage, carrying a fixed rate of return and being always worth 100 cents on the dollar, affords a wholly stable, non-fluctuating return. If the mortgages are bought through the best houses, moreover, this return will be absolutely regular, on the exact due date, as it is the practice of these houses to pay all interest and principal in their own check on the date due. Thus they save their clients the annoyance of the delays in collection which are so frequent in dealing with farmers, who are traditionally less prompt in meeting their obligations than city business men. They are sure but slow-to reverse the aphorism.

Fair Income Return

In these days, old conceptions of what is a fair interest return are a good deal disturbed. What may be basic changes in the level of interest return are obscured by the effect of lost confidence on many classes of securities. If we compare the return on farm mortgage investments with the return on other types of investment which were formerly regarded as in somewhat the same class for safety, the advantage in return which the farm mortgage formerly enjoyed has undoubtedly been reduced or lost altogether. But the conservative investor will not allow himself to jump to the conclusion that for that reason the farm mortgage is relatively less attractive than before. Rather will he analyze the reasons for this change in the relative income returns and discern the undoubted fact that it has come about chiefly because the farm mortgage has established for itself during these recent years of stress, a unique place in the confidence of investors. It has brought its friends great satisfaction and peace of mind amidst the wreck of security values generally.

How many investors have wished that more of their principal had been thus safeguarded! A glance at the investments in r cent months, of the life insurance companies alone, will tell the story. They buy the farm mortgage for safety and stability, and getting that in the largest measure, they consider 51⁄2 per cent. to 6 per cent. not only a fair but a generous return, even in these days of unprecedented yields on securities that in other days

have been near the top of the list. We are not through the period of uncertainty-6 per cent, and maximum stability is quite likely to bring a fairer return in the end than a higher nominal rate with less stability.

Exemption from Care

Investors in standardized farm mortgages are burdened with less care and detail than most. Many houses make their mortgages as easy to manage as registered bonds. The investor puts the investment away, registered in his name, for the term of the loan, and receives his interest by check on the date due, without even the labor, if he doesn't want it, of clipping coupons. At the maturity of the investment he is offered the choice of a return of his investment or of a reinvestment, the house relieving him of all details of collections and, throughout the term of the investment, agreeing to take care of insurance, taxes, etc., free of charge. In short, the modern farm mortgage banking house cares for every loan it sells throughout its term just as fully and carefully as though the loan remained its own property. As a result, many houses can truthfully assert that in twenty, thirty, forty and even fifty years of business, no purchaser of their loans has been allowed to lose a cent of interest or principal.

A necessary corollary of such a record is the feeling of these houses that they cannot afford to take any chances, and they rightly contend that they would lose more in allowing a customer to lose than would the customer. "A good name is rather to be chosen than great riches" in the farm mortgage banking business, on entirely commercial grounds, for good will is the best asset of such a house. At the same time the investor in such mortgages may fully control his investment by holding all the papers. He has independence of control plus complete protection by a responsible banking house. This is a feature of modern farm mortgage investing too little appreciated at its full value, even by those most familiar with it, for, like insurance, it is seldom needed, although all important in an emergency. In fact, such farm mortgages, carrying the protective service agreements of a responsible house, might well be termed "insured investments."

Acceptable Duration

Thoughtful investors seem more and more to favor moderately short term investments, at least for a part of their funds. By keeping his money so invested as to furnish an investment fund each year, the investor can be sure of getting at least the highest average return on his money, of having cash

available for emergencies, and of conforming his investment always to the conditions of the time. For example, an investor in fiveyear farm mortgages may so arrange his maturities as to make available one-fifth of his fund each year, either for reinvestment or other use. For banks this policy proved especially advantageous during the war. In Vermont the savings banks did not have to sacrifice a dollar's worth of securities to take care of their Liberty bond requirements and the loss of deposits. Repayments on their farm mortgages took care of the emergency.

Where reinvestment is so simple as in the case of farm mortgages, moreover, continuity of investment and freedom from care is not sacrificed to the advantage of maintaining this liquid position,

Acceptable Denomination

The better farm mortgage banking houses have made available farm mortgage investments in every denomination from $100 upward, either in the form of single mortgages or of divided mortgages. At the same time, even blocks of $25,000, $50,000, $100,000 and even $500,000 and $1,000,000 of completed loans can be purchased at one time "over the counter." No investment is available in more convenient denominations than the farm mortgage.

It would seem that when these facts are more fully appreciated by the investing public, the demand for such farm mortgages must normally far exceed the supply, as has often threatened to be the case in recent years.

Familiarizing Patrons with Department

Facilities

It happens only too often that the patron of one department of a bank or trust company is unaware of facilities offered by other departments because they have not been brought to his attention by the management or officers. Although personal contact is the best means of familiarizing depositors or patrons with the varied character of banking or trust company service, the same result may be often accomplished by distributing well written booklets similar to that recently issued by the Old National Bank and the Union Trust Company of Spokane. The alliance of these two institutions provides a comprehensive range of banking, investment and property management service, the advantageous features of which are clearly described for lay consumption in the booklet which bears the title "A Word of Introduction."

The New Business Department is a relatively new idea in banking and trust company practice. It is the logical result of several causes-one of which is competition and another, the desire of progressive banks to render more efficient service to their patrons and the community. The primary purpose is not only to tell the people about our facilities but also to create an atmosphere of good will. The machinery of such a department falls, naturally, in the hands of the publicity manager, who works in co-operation with officials and an Officers' Committee of Twenty and who handles publicity campaigns through which many prospects are presumably to be obtained. On another page there is a chart which graphically shows the different sub

divisions and organization of a modern New Business Department.

The scope of the New Business Department may be classified in two ways, namely (1) geographical and (2) the type of service to be offered. The territory specifically covered by the New Business Department of the Old Colony Trust Company, for example, consists of New England, except Connecticut, for the time being. Of course, business outside this district is obtained as heretofore by traveling officers and through other mediums. To visualize the type of service which this department is offering, the following table has been prepared:

I. Banking Service: (a) To banks; (b) To individuals, corporations and municipali

II. Trust Service: (a) To individuals. 1. Custodianships, agencies and voluntary living trusts. 2. Executorships and trusteeships. (b) To corporations. 1. Acting as trustee under mortgages. 2. Acting as transfer agent. 3. Acting as registrar. 4. Acting as fiscal agent.

III. Foreign Service: (a) Financing shipments. (b) Issuing letters of credit. (c) Selling acceptances. (d) Selling foreign exchange and bullion. (e) Furnishing information concerning trade and kindred subjects.

IV. Safe Deposit Service: (a) Renting safe deposit boxes in the company's three vaults.

V. Information Service: (a) Concerning securities and investment conditions. (b) Concerning laws on taxation and Governmental requirements. (c) Concerning Financial, Economic and general business subjects.

It will be noted that the New Business Department does not offer investment service of any type. It is distinctly understood that developing investment business shall be the function of the Bond Department, through its salesmen and managers and shall not be touched by the New Business Department.

Prospect Division

There is no promiscuous soliciting. The Department expects to receive "leads" or the name of prospects from various sources, namely: the results of advertising, from bond salesmen, from newspaper articles, from special lists, but primarily from all the officers and employees of this company.

We urge upon any employee who knows of any individuals or corporations whose business we do not possess and whom he thinks would be desirable, to notify our department of the facts and furnish us with any knowledge which they may have concerning the prospects. If, after a careful investigation, these prospects are approved by the Officers' Committee, and their business is obtained, the New Business Department records the name of the person who gave us the name of the prospect. There is also a system of credits for employees who aid us in this manner.

The Research Division

The new business leads passing through the prospect division come under the division of research, where they are classified and investigated. This involves the use of the Statistical or Credit Departments and any other sources which would lead to an adequate knowledge of the prospect. These investiga

enter into all the factors bearing on the desirability of the prospect.

The Solicitation Division

Conferences of the Officers' Committee are held once a week, at which time the names of prospects, together with a report from the research division is presented for discussion. The officers who gather for this conference bring to the meeting their best knowledge of conditions, connections and people, the result being that a great deal of valuable, additional information is oftentimes obtained which enables the committee better to determine the method of solicitation and the person who will be responsible for it. It is believed essential that the prospective client should be reached under the most favorable circumstances.

This committee also analyzes past interviews which shall have been made with prospects, and discusses the next step in the process of solicitation.

The Records Division

The administrative work of the department is lodged in the records division. It is the duty of this division to care for the "Central File"; to keep all the analyzed data, correspondence, and reports of interviews pertaining to each case. It files all cases alphabetically and controls them by a system of cards filed alphabetically, chronologically and geographically.

It is absolutely essential that this series of cards, known as a "follow-up system," be carefully handled because there are many cases coming to the attention of the department within a given week, while often cases remain in the files of a department as possible prospects for months, if not years.

In addition, the records division keeps a careful record of all new accounts and new business as well as sources from which the business and leads are derived and makes semi-annual reports to the Officers' Committee and the president and directors of the company.

Guides Division

This division has been created to act, more or less, as a "Hospitality Committee." During the coming year and the following year it is hoped that many thousands of strangers will come to this bank in view of special invitations which will be issued to them throughout the country to use this bank as their headquarters. All the members of the Officers' Committee are ex-officio members of this division and employees who invite their