The Bank Won't Count Your Trees
Federal land banks rule that orchards offer insufficient security for long-term mortgage loans, citing the risk of disease and neglect.
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Following a controversy over an announcement by C. B. Kegley, an appraiser for the farm loan bank, that orchard trees added nothing to the loan value of land, D. G. O’Shea, president of the federal land bank at Spokane, has issued specific instructions. O’Shea noted that while intensely cultivated land is valuable, they cannot consider fruit trees as insurable improvements because they are destructible. If an orchard is not properly cared for, the trees may die or become diseased, and if ownership changes, there is no assurance a future owner would have the inclination to maintain the trees over the 40-year life of a mortgage.
“They can not possibly be fairly considered in the value of the land for the reason that they are destructible.”
This 1917 debate over how banks value agricultural assets highlights the tension between land as a living, fragile ecosystem and land as a static financial instrument—a conflict that remains at the heart of rural land-use policy in the Tri-Cities area today.
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