The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1912-08-31
FOREIGN FARMERS BANKS.
SUCCESSFUL COOPERATIVE
BANKS OF BELGIUM.
The Rural Credit System Has Proven
of Great Benefit to Farmers and
Has Brought Independence and
Prosperity.

Washington. Aug. 25.--Minster
Larz Anderson has completed the in
vestigation of the cooperative systems
of Belgium which he undertook in
connection with President Taft's at
tempt to establish cooperative credit
In this country for the benefit of the
American farmer.
The first attempt made In Belgium
to relieve the farmers from the bur-
den Of high interest rates was essen
TALLY governmental undertaking. 1t
Is interesting to note, however, that
the cooperative idea as developed in
Germany was later adopted In Bel
gium and has largely supplanted the
plan adopted by the Belgian Govern
ment. at lesat so far as the smaller
landowners are concerned.
BY law. In 1884, the General Saw
ings Bank was authorized to make
loans to farmers and to societies of
farmers AS guaranty for these
loans small corporate bodies were
formed. known as "comptoirs agri-
coles" which guaranteed the loans
to the General Savings Bank and for
this service received a small COM
mission. As the plan worked out,
these guarantors found 1t both more
profitable and safer to act as sureties
for the larger landowners. The small
er farmers could not offer as good Sc
curity and the commission paid to
the "Comptoirs agricoles" on such a
loan as was required by a small far
ner did not make the game worth the
candle. Consequently. In the first
twenty-five years after this form of
loan had been authorized by law,
only about ffteen "comptoirs agri-
coles" were formed In all Belgium.
or the three thousand and odd loans
guaranteed by these "comptoirs agri-
coles" ut the end Of 1909, only a
fraction on hundred were for
amounts less than $3.50. which shows
that the small farmers received little
real benefit from this scheme.
Realizing this. the Able Mellaerts
set about to adapt the Raiffeisen sys-
tenn to Belgian conditions. He es-
tablished his first rural cooperative
bank In 1892. By 1910 six hundred
Nh6 forty-''.ree OF these banks had
been established THIS shows the i'm
mense Growtn OF the operative
credn idea in Belgium. Except that
BY law these co-0peral !e banks or
societies in Belgium are required to
raise foundation capital to start
with and are not allowed to hold
their reserve funds as indivisible,
there Is little difference between the
Belgian societies and the Raiffeisen
banks Of Germany. The societies in
Belgium. as In Germany. are served
by central cooperative banks. In
Belgium these central banks supervise
the management and audit the books
OF the rural cooperative banks. They
also guarantee loans made to the ru-
raj banks by the General Savings
Bank. In 1894 a law was passed set
ting aside 100000 francs of the
funds of the General Savings Bank
| which was to be loaned to the rural
banks at the set rate of 3 IA per
| cent. In order to enjoy the benefit
| OF this law rural bank has to be-
| come member In central cooper
| ative bank and has to have the CEN
tral banks guaranty for the loan. The
central bank receives a commission OF
one-twelfth Of 1 per cent of the in
terest charged as payment for this
surety. These central cooperative
banks are formed among the rural
banks. each rural bank subscribing
for share Of stock valued at $25 and
assuming liability for the central
banks Indebtedness to the sum of
$3.50. The rural bank receives q set
dividend of per cent on it's stock in
the central bank.
+, Complete statistics of the business
done by the cooperative societies IF
Belgium are not obtainable, but the
! totals made in a year amount IN aho,t
II million dollars and they carry de-
posits totaling probably two millions.
which. I'm a country the size of Bel
guim, shows healthy growth for
the cooperative idea i'm that coun-
/ try.