The Monitor-register., 1897-03-26
CREDIT BANKS.
CAN BE MADE TO GREATLY BENEFIT
AGRICULTURAL COMMUNITIES.

l ~ IL fuNO1 ~ !
AGRICULTURAL COMMUNITIES.
The American Agriculturist Explains How
Farmers Are "MiIked' by Crossroads
Stores-With Credit Banks They Could
Borrow at Low Rates of I~nterest-They
Would Then BE Free to Buy In the
Cheapest and Sell In the Dearest Market.
The American Agriculturist, one of
the leading farm journals of this coun-
try, has been running a series of excel
lent editorials on the subject of credit
banks for the benefit of farmers. One of
| the first, in the issue of Nov. 81, 1896,
discussed the agricultural credit banks
of England. 1t attracted considerable at
t~ention, and the Grange and Farmers
Alliance in several states are seriously
| considering a trial of the system there
outlined.
A recent editorial showed some of the
benefits of the Scotch credit banks which
loan small amounts to borrowers with
out collateral, but who can give at least
two good sureties By this means a Ca
pable and trustworthy young man can
obtain a few hundred dollars, at a mod
crate rate of interest, with which to
stock a farm which he has just bought.
He does not have to pay interest on a
dollar more than he actually uses and
at any time can return any part of what
is borrowed and stop interest on the part
returned. Dunning Macleod, a great au
thority upon banking, says that this sys-
tenn, introduced years ago, gave Scot
fish agriculture a prodigious stimulus,
while to it also he attributes the mar
velous development of manufactures
and other industries in Scotland in the
face of adverse natural conditions. Mac
leod declares that the use of this form
of credit has been more helpful to Scot
land that the richest gold or silver mines
would have been.
The Agriculturist then described the
special benefits of the branch banks of
Scotland and Canada. Ten Scotch banks
have 1000 branches. Each little town
where there is an agent of one of these
ten banks has practically the same bank
ing privileges as though the headquar-
tiers of the bank were in the town,
whereas the American towns facilities
are confined to the little bank located
in its midst, or, more likely, in a larger
town, village OF city 10 or 30 miles
away, for it is often so and sometimes
100 miles from points in the south and
west to the nearest bank.
We quote the following from one of
the more recent editorials in The Agri-
culturist:
1.-THE agricultural credit bank de-
scribed in u previous article, or our
own very successful cooperative build
ing and loan associations, might also es-
tablish branches or agencies. Thus one
every town or hamlet in a county or
group of counties, bringing its advan-
tages home to depositors and borrowers
everywhere. In this way, even in a
sparsely settled farming country. a CO.
operative banking society could get
enough business to be soundly success
full. The agricultural credit banks de-
scribed in the editorial referred to en-
able the honest poor to cooperate in
other matters. The testimony of hun
dreds of similar institutions in Europe
shows beyond all question that these
credit societies have encouraged CO.
operation in all its forms, stimulated
thrift and self help and improved the
whole moral and material condition of
their members The need is certainly
urgent for similar effort at self help in
very many farming communities in this
country as well as among workers in
other occupations. In these times, when
the margin of profit is so close in farm
ing, as i'll other business, it is all the
more necessary for farmers to be able to
conduct their affairs with the utmost
economy, for which purpose capital at
reasonable rates of interest is an impera-
tive necessity.
Whatever opinions are entertained
concerning the standard of values, there
should be unanimity in an effort to per-
feet a sound plan of cooperative bank
ing that will enable farmers to help
themselves. How great this need is can
hardly be exaggerated. Taking the
United States as a whole, we doubt if
one-tenth of our farmers use banks or
are within convenient reach of banking
accommodation. Without it they cannot
employ credit in the true sense. Yet
nine-tenths of the volume of business
transacted by other people is done with
credit instruments. But the average
farmer is able to use only the credit Of
fered by the crossroads store, which
'milks' him to the tune Of Is to 40 per
cent by taking his stuff in trade at far
below market price, charging big profits
IN what the farmer buys, and on top of
this exacting exorbitant interest.
"No legitimate business can stand
this sort of accommodation, certainly
not agriculture. The evil exists whether
prices are high Or low, currency plenty
Or scarce. The deeper one delves into
this matter the palmer it appears that,
whatever is done about monetary stand
ards, better banking accommodations
that is, better facilities for the use of
credit instruments, such as checks,
drafts, etc.-are vital to the farmers
welfare. Nor can he, need he or will he
pay more for these facilities than do
those in other business