Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1912-09-20

very unpleasant for the Times and the
solder of the strings which make 1t
Jump, we are inclined to think that
Woodrow Wilson is already pretty
yell informed as to the recent politi-
.al history Of Minnesota. The de-
7elopments Of the past three months
would so indicate.
COOPERATIVE AGRICULTURAL
BANKING
The bankers who are DESTROYS of
extending agricultural education,
could do a much greater service for
she farmers by helping to introduce
khe European system Of extending
credit to the farmer. An interesting
paper on Gland and Agricultural
lredit' was read by G. A. Conant at
she recent meeting of the American
Bankers association, from which ex-
sracts are made as follows:
Sin Europe,' he said, "the man
xhc has money to lend upon mortgage
X No longer obliged to make personal
animation Of the property, nor to
!, K his capital upon a single invest
Eeut in q nontransferable form. He
las only to buy a negotiable bond,-
coupon or register, according to his
grsference-which he can sell as readi-
ty as the bond Of the government and
with even less risk of %fluctuation in
It's price. He has behind the bond not
merely the land, the source of all
wealth, but he has the pledge Of a stock
company that they have examined the
properties upon which loans have been
made, that all such properties are
acid in the aggregate as assets against
the outstanding bonds, ar'l that the
company has in addition an adequate
capital to cover any uncX,,ected shrink
age in the value Of the property behind
Its bonds.
"The bonds issucl hy the Credit
Eoncier Of France ander this system
are made attract, e to the borrower by
the system of amortization by which
they are paid off and by the long terms
aver which the amortization extends.
I'm the loans male by the Credit Fonci-
sr Of France, more than three-quarters
are for periods Of SO years or more, so
chat the amortization charge involves
only a small addition to the annual in
terest. The rate of interest charged up
On loans during the last few years by
the Credit Foncier of France has been
4.30 per cent. For a loan repayable
in 30 years, the semiannual payment re-
luired has been 1882 per cent, or just
snder 3 per cent, making the two pay |
ents for the year equal to 1904, or
IT under 6 per cent. Where the loan is
years, the sum of the two annual
.rnts falls to $3.50 per cent, AL
70 years to 1882 per cent. It may
We possible to float bonds in this
: ,H>rv at a rate so low as to permit |
: upon mortgage at 4.30 per cent,
even if 5 or 81 per cent is charg-
lie additions for the amortization Of
80 principal will not be materially
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
aye made in France, it ought to be pos
to make them at a point much
than the farmer pays under the
axisting system of disposing of mort
cages to individual investors. The aver
age rate of interest shown upon mort
cages on farm lands was 7.07 per cent;
but this is only an average, pulled
down by such rates at 5.66 in New
York, 5.43 in Pennsylvania and j.5S in
Massachusetts,, while the average rate
>not the maNimum) rises as high as
3.lS per lent in Minnesota, S.3S in
Texas, $40 in Mississippi, 9.S7 in
Washington, 1885 in Idaho and 1897
n Montana.'
he speaker discussed briefly the sys-
Gem Of cooperative popular banks,
which has obtained it's widest extension
in Germany. "The Raiffeisen system Of
popular banks is based upon the prin-
f'fle of cooperation among farmers,
s.Nally peasant proprietors,'' he con-
Anued. "The principle upon which
these are established is that of the I'M
limited joint and several liability of !
The members; but as limited liability
has been found to afford adequate pro-
lection, about 8 per sent of the German
Banks are now based upon limited La |
bility rather than unlimited. |
"The credit extended by these banks |
is chiefly personal rather than by way
81 mortgage security, the united guar
auty Of the members Of a society be- |
ing adequate protection to the lender |
Tor the repayment Of the money borrow
The working capital is derived
from the shares which are paid up bv
the members, the reserve fund, saving
deposits and deposits on current &C.
count, and finally the sums which the
bank procures by means of loans from
central cooperative banks, other types
Of banks, or private individuals. The
Business of the rural bank consists for
the most part in making advances to
the members: Surplus ash on hand is
deposited with the central banks or in
vested IN banking operations with
third parties.'
Summing up the relations between
she proposed plan Of the monetary com
mission for bank-note reform and land
mortgage banks, Mr.. Conant declared
Fiat the farmer has the right to de-
mand the same facilities and o2portuni-
ties for obtaining credit as the manu-
hctu4er and merchant, with the limita.
ton that the facilities afforded him