The Clarksburg telegram. [volume] (Clarksburg, W. Va.) 1874-1926, 1912-09-19

per cent. but even If five or five and
one-half per cent is charged, the ad-
ditions Tor the amortization of the
principal will not be materially great
or than in the case of the loans made
by the Credit Foncier of France.
While it might not be possible to
make loans as low in America as they
are made in France, It ought to be
possible to make them at point
much lower than the farmer pays
under the existiAS system of d:spos-
ing of moatgages 10 individual in
vestors. The average rate of interest
shown by the federal census of 1890
upon mortgages on farm lands was
7.07 per cent; but this is only an aver
age, pulled down by such rates as
-5.66 in New York, 5.45 in Pennsyivan-
la, and $50 in Massachusetts, while
the average rate (and not the maxi
NUM- rises as high as SIS per cent
in Minnesota, 6.5S in Texas. 979 in
Miss 'ssippi, 9.S7 in Washington, 1856
in Idaho, and 10 81 in Montana"
The speaker discussed briefly the
system of cooperative popular
banks, which has obtained its widest
extension in Germany,
The Reiffeisen system of popu-
lar banks is based upon the princi-
pie of cooperation among farmers.
usually peasant proprietors," he
continued. THE principle upon
which these are established is that
of the unlimited joint and several
liability OF the members; but as
limited liability has been found to
afford adequate protection. about
eight per cent OF the German banks
are now based upon limited liability
rather than unlimited.
The credit extended by these
banks is chiefly personal rather
than by way of mortgage security,
the united guarantee of the mem
bers OF society being adequate pro.
lection to the lender for the repay
ment for the money borrowed. The
working capital is derived from the
shares which are paid up by the
members, the reserve fund, savings
deposits and deposits on current ac-
counts, and finally the sums which
the bank procures by means OF
loans from central cooperative
banks. other types of banks, or pri-
vate individuals. The business of
the rural bank consists for the most
part in making advances to the
members. Surplus cash on hand is
deposited with the central banks or
invested in banking operations with
third parties"
Summing up the relations be-
tween the proposed plan of the
monetary commission for bank note
reform and land mortgage banks.
Mr.. Conant declared that the farm
or has the right to demand the
same facilities and opportunities for
obtaining credit as the manufactur-
er and merchant, with the limitation
that the facilities afforded him must
be based upoD sound banking prin-
ciples.
"a central organization for the
issue of mortgage bonds, recogniz-
ed by the federal government. like
the credit foncier, would probably
be required in order to give the
bonds a sufficient guarantee and a
wide market" he said "organiza-
lions under state law, especially II
they lacked the guarantee of the
state government, would defeat the
principle of broad reform in mort
gage banking, because the bond is
sued in the poorer states could not
be sold at home or abroad at the
same rate as those issued in the
richer states. where there was less
need for such institutions.
Without committing myself at
this time 10 a definite plan, 1t is
probable that It would be found ad-
vantageous to establish state organ
izatlons. charged with making local
loans. under rules laid down by the
central organization. and that the
latter should be able to issue its
bonds under its own guarantee. se-
cured to 1t by the deposit OF mort
cages or bonds guaranteed by tho
state associations. In other words,