A Stake in the Land :: IV INDIVIDUAL LAND DEALERS

IV INDIVIDUAL LAND DEALERS

Except for government land grants and homestead acts, land dealing and colonization in the United States have, up to very recent times, been entirely in private hands. Land is one of the necessities of life; land dealing, consequently, is one of the most important features in social and economic relations. Yet it has been left unregulated, with the result that land dealing is now the most chaotic sort of business, one which has not worked out its own definite methods, rules, and traditions, as banking and other branches of commerce and business have done. It may even be said that people who deal in land have fallen, in the eyes of the public, into the ranks of those open to suspicion.

In the field investigation for this study, land dealing was considered to be an important phase of the problem of Americanization in rural districts. Based upon the experiences and facts collected, the picture may be drawn as follows:

According to their methods, private land dealers may be classified as follows:

(1) Land "sharks," divided between those acting outside the law and those acting within the law; (2) the ordinary real-estate dealer—of two types—the lower, selfish, narrow-minded, the higher, public-spirited; (3) "realtors"; (4) land-colonizing companies.

LAND SHARKS

Land sharks are of two distinct varieties. One type is composed of men of a criminal character. The words "lawful" and "unlawful" have no meaning for them. They often sell land as their own which they do not own, or sell land other than they have promised or even shown to the buyer. Their only aim is to cheat the latter out of his money and to escape the penalty of the law.

These pirates injure both land seekers and legitimate real-estate men. They hang about the trains, railroad stations, and all points where there is a chance of attracting the land seekers. They are sometimes able to entice those who are being brought in by reputable land men. Often the pirates are of the same nationality as the immigrants and by clever emphasis on this common bond and by skillful manipulation of truth and lies they steal the men away to look at land which they call their own. The land pirates do not advertise, but live on the advertising that the reputable land men do. As a result the latter curtail their advertising and do a comparatively small amount of it, since they are prevented from realizing the full profits due on the investment. This is a situation that forces the land men to realize the need of a licensed real-estate profession.

The president of a land company in Wisconsin gives this description of the operations of the land sharks and of the effects of their activity:

Relative to the land pirates, it is hard to estimate how much land they sell, but we find that for every customer they do sell to they queer deals for this country of from ten to twenty-four which the other land men might have landed.... I estimate that within the last two years the city of ---- has lost from fifty to one hundred customers for land though these pirates, who infest the depot and meet all trains.... Their first act is to find that the man is looking for land and to find out whom he is expecting to see, for they usually come up with some definite proposition to look over. The pirate then proceeds to throw cold water on the locality that he is to look over, and very often challenges the integrity of the party whom he is going to see. He does this preparatory to starting in to taking the man off and showing him something of his own. Frequently these men do not own a foot of land, but have a few pieces for sale on commission. They are usually irresponsible men and often put through some rocky deals, and it is through them more than anything else that the real-estate men have often got very bad names for the way they have handled customers who come up to buy land. When the customer's mind has been poisoned against the party whom he was coming to see, and against the particular piece of land or locality where he had formerly planned to buy, he is often ready to quit and go back, and it is very hard for anyone thereafter to deal with him, because his confidence has been shaken in the people and the country.

The other type of land shark is composed of men who act within the law, but, for their own gain, apply methods which are mildly called "sharp" or "unethical." They either misrepresent the qualities of the land they offer, or charge a higher price than the land is worth, or make in the contract such stipulations as will afterward ruin the settler. They profit by the settlers' failures, for each settler adds something to the improvement of the land before the conditions of the land-purchase contract which he is unable to meet compel him to leave the land. The land shark sells the land to a new settler for a still higher price, capitalizing the improvements made by the former settler. With the new settler the process is repeated, and so it goes, like an endless chain. It is similar to the method of splitting fees practiced by private employment offices and foremen who keep men coming and going.

There are no data collected to show the actual extent of the activities of the land sharks, but, judging by the stories told by the immigrants, by records of court proceedings, by suspicious land advertisements in newspapers, especially in the smaller, less reliable foreign-language papers, and by the number of cases brought to the attention of the state immigration commissioners, it is safe to state that the immigrants suffer very greatly from the land-shark evil.

LOWER TYPE OF LAND DEALER

One group of the ordinary type of land dealer might be characterized as being composed of narrow-minded, hard, and even heartless business men, working solely for their own interests. Their business consists merely in buying and selling land as rapidly as possible. In making prices for land and in making contract stipulations with the buyers, they do not "monkey," as some of them say. As a rule they do not charge a higher price than the land is worth—that is, not higher than the prevailing market price in a particular locality. They also avoid unreasonable or impossible contract stipulations. When land is sold, when the contract has been signed by both sides, then their care and interest in regard to the land and its owner end. If the buyer later fails to meet the contract stipulations in any particular the land dealer sees to it that he leaves the land at once. The dealer then advertises and sells the land again. Usually, no compensation for improvements made by the settler, in case of his failure, is stipulated in the contract. If there is any gain to the land dealer from the failure of a settler, the dealer often claims that such gain is more than offset by heavy expenses, such as for advertising, agents' commissions, and the like, in finding a new buyer.

The land dealer gives little or no consideration to the causes of the failure of the settler. According to the observation of the writer, a large number of failures in settling on land are not due to the personal defects or weakness of the settlers, but are due to external causes, such as lack of capital and credit, lack of market, poor roads, etc. The settlers who have failed owing to such causes might be criticized for their poor judgment in selecting the land, but the land dealers might equally be criticized for not warning the settlers of the difficulties before they buy the land.

The land dealers ought to know the market facilities, the extent of capital and credit required for success on a particular piece of land and in a particular locality. As a matter of fact, dealers of the type under discussion do not warn the settlers. They give advice of an optimistic character and they apply to the settler the Darwinian theory of survival of the fittest. A number of these land dealers said to the writer:

Well, it is up to the settler himself, either to succeed or to fail. If he fails, he has himself alone to blame, and he must give place to the settler who is able to succeed. There is no room for weaklings on my land or anywhere else in this world.

The results which follow in the wake of such land-settlement policies are described in the following extract from the letter of a county agent. He writes from a locality where many of the settlers are immigrants:

In some parts of this country ... the statistics show that there is a complete change in the farmers every seven years. That means that several farmers are coming and going all the time. Several farmers are paying out taxes and interest on something they will never own.... As to the land companies doing things for the settler, in the most part they take care of the new man for a time, but I notice that they close them out, too, if taxes and interest are not kept up pretty well.

A similar condition is described in the letter below from a county agent in the same state:

The land companies in this county are not putting forth any special effort to make it easier for the new settlers to succeed. As far as I know, all the land companies in this county are reliable. They live up to their agreements with the settlers. However, I can also vouch for the statement that many of our farms, with very little clearing, are continuously changing hands.

The importance of advice and warning from the land company to the settler, and the deplorable infrequency with which it is given, are spoken of in this statement by a county agent:

So far the ... settler's only means of protection has been the county agent. From the county agent the settler gets the true condition of the land, climate, and possibilities in general, of the particular region into which he is going. Too often, though, the settler is met at the train by the real-estate agent, and this agent does not let his prospective buyer get in touch with anyone else until after he has been sold a piece of land. After the settler has bought his land the real-estate man thinks that his connection with him has ceased, and he is no longer interested in him other than to see that the promised payments are paid when due.

THE PUBLIC-SPIRITED LAND DEALER

The second group of the ordinary type of land dealer, though not so large as the first group, consists of men who have a broader outlook upon their business and work. While they also are after personal profit, they understand that they are rendering, in return for their profit, a service not only to the land buyer, but also to the public. Accordingly, they are considerate of the settler, try to make him successful, and, having the social point of view, they promote education, welfare work, and other community interests among the settlers.

The writer has met a number of such broad-minded and public-spirited land dealers. Some of them were so modest as to deny that they were interested in or were keeping in mind any public or social end in their business.

Well, I am after profit, nothing more. By helping the settler to make a success through extension of credit to him, through demonstrations, through finding a market for his products, and through organizing community work, I am only advertising my land and attracting new settlers. That is, I am applying a little bit of Henry Ford's methods to the land-settlement business, that's all!

This explanation was given by a large land dealer in one of the Middle Western states. Further conversation with him showed that he took great pride in the fact that the settlers on his land esteemed him highly and had confidence in him.

It is land men of this type that a county agent from the North Middle West speaks of in these words:

The land men in this county all believe that it is to their own interests to have every settler a satisfied settler. They are getting away from the idea that they are done with the settler as soon as they sell him a piece of land. They now believe that they are just starting their relations with the settler when he buys from them.

Another county agent writes that he believes that

the real-estate men are beginning to try to see that the settlers to whom they sell land make good. They are doing this by being lenient with their conditions and by picking only the better types of land for settlement.

One of the real-estate men who have this more public-spirited view of their work describes his relations with the settlers as follows:

I try to assist the settler by giving him all the moral support and encouragement possible, by keeping friendly with him so he feels free to come to me with his every problem. I stand ready to finance any deserving settler for the full purchase price of good milk cows, or to buy a pig or two, or for any other thing that is sure to help him over the hill. Especially, I go among them organizing farm loan associations and community-center gatherings, thereby bringing the whole family the general social opportunities that every normal family craves and has the right to expect.

View of a farm People helping a farmer

FRIENDLY ASSISTANCE MAKES PIONEERING LESS BAFFLING

A real-estate company with offices in Chicago states that it assists the individual settler in many ways:

1. We sell him horses and cows on liberal terms.

2. We help him buy on credit building materials and other necessaries, such as feed for his stock, small tools, etc. We O.K. many small bills. 3. We many times indorse settlers' notes at banks in order to help them get credit, and thus get the money with which to make progress.

4. Our organization keeps in touch with parties to whom we have sold. Our men see them occasionally and give them advice. Often we are able to be of material assistance in helping them to buy the right stock at the right prices.

5. We keep hammering away at the importance of their keeping in touch with the county adviser and getting the free literature that is sent out by the state and Federal authorities.

6. We try to be of aid in everything which promotes the general social and economic welfare of the community. For example:

a. Our Mr. —— was chairman of the Liberty Loan Committee in —— County.

b. Any proposition for new roads, new schools, or new churches gets our hearty and immediate support.

c. In all cases where we have been asked to donate an acre or half acre for church purposes, we have done so.

d. We have been instrumental in helping a number of incipient business men to start cheese factories.

"REALTORS"

Certain phases of the real-estate business requiring concerted action, and especially the desire of the higher type of land dealers to put their trade or profession on a higher level, and thus to prevent it from falling into disrepute in the public eye, have led the better type of real-estate men to organize themselves into local real-estate boards with an associate membership of leading local merchants, bankers, lawyers, and others particularly interested in real-estate developments. The "realtors" prefer to speak of their trade as a "profession" or "calling," not a business or trade, for they claim that an up-to-date real-estate dealer is a community builder and leader whose preparation requires a good general education and a special training, pointing out that a number of the best colleges in the country are giving courses in the real-estate business.

Nineteen local boards from thirteen states formed a national association in 1908. At present the association comprises 130 local boards in this country and Canada, with a total membership of about 8,500 persons.

The aims of the National Association of Real Estate Boards are to promote efficiency among its members, to be a clearing house for the exchange of information and ideas, to publish an organ of the association, to broaden the sphere of influence of the local real-estate men, to assist in organizing local boards, to fight the land "sharks" and "curbstone brokers," and to maintain a high standard of professional ethics.

The members of the associated local boards call themselves "realtors," as distinct from "real-estate men" or "land dealers"—names which, they feel, are tainted by the unscrupulous methods of the "sharks."

The association has published a code of ethics for its members, in which paragraph 13 is especially noteworthy. It reads:

As a duty to the public and each other, members should report to the board misrepresentations or any fraudulent, criminal, or illegal act pertaining to real estate, which may entrap and injure innocent or ignorant persons; and the board owes it to members and the community to take steps to stop such practices and to punish parties guilty thereof.

The local boards often render certain services to the community. The valuation committees are often called upon to give their expert advice in land matters even to the courts and government administrative offices.

But how far the association is successful in combating the underhand business methods of the unscrupulous real-estate men is very difficult to say. The fact is this, that the association favors public registry and regulation of the real-estate trade and at present is working toward that end, supporting bills of this nature that are introduced in the state legislatures. A number of the realtors are not in favor of the words "license" and "licensing." They prefer instead the words "certificate," "registry," and "regulation," believing that the word "license" is associated in the popular mind with saloon-keeping and similar trades of a lower order.

The desire of these men to separate from ordinary real-estate men by calling themselves "realtors" and their business a "profession," and their advocacy of public regulation, show that the land "shark" is still very much alive and that the real-estate men themselves by their own private efforts are not able successfully to combat the "shark."

In the field of private land dealing there is appearing a substitute for the individual dealer. The modern colonization company has recently grown up, and out of this new project have grown broader policies and methods.

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