The enterprise. [volume] (Wellington, Ohio) 188?-1899, 1897-03-24
CREDIT BANKS.
Gan Be Made to Greatly Benefit
Agricultural Communities.
The American AEriculturist Explains
How Farmers Are "NIllked" by Cross
roads StOres-COuld Borrow At
Low Rates of Interest.


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 November Il.
1896, discussed the agricultural credit
banks of England. 1t attracted consid-
cradle attention, and the Grange and
Farmers alliance In several states are
seriously considering trial OF the sys-
tenn there outlined.
A recent editorial showed some OF the
benefits of the Scotch credit banks
which loan small amounts to borrowers
without collateral, but who can give at
least two good sureties. By this means
q capable and trustworthy young man
can obtain few hundred dollars, at a
moderate rate Of interest, with which
to stock farm which he has just
bought. He does not have to pay inter-
est on a dollar more than he actually
uses and at any time can return any
part of what is borrowed and stop in
terest on the part returned. Dunning
Macleod, great authority upon bank
ing, says that this system, introduced
years ago, gave Scottish agriculture
prodigious stimulus, while to it also he
attributes the marvellous development
of manufactures and other industries in
Scotland in the face of adverse natural
conditions. Macleod declares that the
use of this form of credit has been more
helpful to Scotland than 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
banking privileges as though the head
quarters 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 larger,
town, village or city ten or twenty 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:
"The agricultural credit bank de-
scribed in our previous article, or our
own very successful cooperative build
ing and loan associations, might also
establish branches or agencies. Thus
one society could have a repT~
in every town or hamlet in county
or group of counties, bringing it's ad-
vantages home to depositors and bor-
Iowers everywhere. In this way, even
in sparsely settled farming country,
q cooperative banking society could get
enough business to be soundly sue
cessful.
"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
dlreds of similar institutions in Europe
shows beyond all question that these
credit societies have encouraged CO.
operation in all it's forms, stimulated
thrift and self-help and improved the
whole moral and material condition OF
their members The need is certain
ly urgent for similar effort at self-help
In very many farming communities in
this country us well as among workers
in other occupations. In these times,
when the margin of profit is so close in
farming, as in. other business, it is all
the moro necessary for farmers to be
nble to conduct their affairs with the
utmost economy, for which purpose
capital at reasonable rates Of interest
is an imperative necessity.
"Whatever opinions are entertained
concerning the standard Of values, there
should be unanimity In an effort to per-
teot 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 q whole, we doubt II
one-tenth Of our farmers use banks or
are within convenient reach Of banking
accommodation. Without it they can
not employ credit In the true sense.
Yet nine-tenths of the volume Of busi-
ness transacted by other people is done
with credit instruments. But the aver
age farmer Is able to use only the credit
offered 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 prof
its on what the farmer buys, and on
top of this exacting exorbitant IN
terest.
mo legitimate business can stand
+''is sort of Accommodation certainly
not agriculture. The evil exists wheth-
er 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
standards, better banking accommoda-
tions-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"
A Good Example.