The Birmingham age-herald., 1912-10-12

What this plan offers, writes Presi- dent Taft, lis a means to secure this country greater productivity at less cost, from the farms that are now under cul- tivation, and, above all, to give us more farms and more farmers"
 Based on European Plan
 The plan suggested is based upon the principles of agricultural cooperative credit now in use in practically every country of Europe. Uniform state leg
 slation, in the opinion of President Taft, is essential to the successful adoption of this plan and he has invited the gov
 ernors of all the states to a conference
 upon this subject at the time of the annual meeting of governors In Wash ington in December.
 Were not the interval so short" writes
 President Taft, my conviction of the im- portance of this subject would impel me to invite you to conference at still earlier date"
 | President Taft bases his reoommenda- tions on reports submitted by the Ameri- can diplomatic officers in Europe who have, since last March, been engaged in an investigation of this question, and upon the special report of Ambassador Myron T. Herrick, who has made a study for years of the question of adopting CO., operative credit In the United States. l "A study of these reports" writes Pres l ident Taft, "and of the recommenda-
 tions of Ambassador Herrick, which l am
 sending you, convinces me of the adapt ability to American conditions of the l AL
 the organization of the Raiffeisen banks
 of Germany. The establishment and con- duct of such banks, however, are mat 1 ters for state control. l suggest, also,
 the establishment of land mortgage banks lunder state charters. and the formation
 of cooperative mortgage bond societies along the lines of Landschaften societies of Germany, provided that uniform state legislation can be secured to govern their organization and operation. As a later step favor the enactment of laws by
 Congress permitting the organization of national land mortgage banks, to be oper- ated under strict government supervi-
 sion with the power to guarantee and
 market the guaranteed debenture bonds
 of the state land mortgage banks or CO., operative societies. I recommend for your
 consideration the report and recommen-
 dations of Ambassador Herrick, now pub lshed by the department of state for
 general distribution.
 Funds of Farmers
 ',rhe twelve millions of farmers of the United States add each year to the na-
 tional wealth ss, 0o.o000Oo. They are doing
 this on borrowed capital of $6,040, ,000.0Ov. i On this sum they pay annually interest | charges of s510,000,000 Counting commits
 sions and renewal charges, the interest
 rate paid by the farmer of this country | is averaged at s1a per cent as compared to a rate of 41s to 31s per cent paid | by the farmer, for instance, of France or Germany.
 Again, the interest rate paid by the American farmer is considerably higher | than that paid 5 by our industrial cor porations, railroad or municipalities. Yet, ] l think, 1t will be admitted that the | security offered by the farmer in his | lands Is quite as sound as that offered | by industrial corporations. Why, then, will not the investor furnish the farmer with money at as advantageous rates as he is willing to supply it to the indus trial corporations? Obviously, the advan- | tage enjoyed by the industrial corpora | tion lies in the financial machinery at | it's command, which permits it to place it's offer before the investor in a more attractive and more readily negotiable 1 form The farmer lacks this machinery, and, lacking it, he suffers unreasonably. | This is not theory. But the advantages to be gained by the adoption of this plan go beyond the direct saving in interest charges to the | farmer. The great necessity which prompted the establishment and extension of this plan throughout Europe was that of checking the rapidly advancing in- creases in the cost of foodstufYs, brought about by the inevitable increase in con sumption and the failure of the long drained soil to afford a corresponding | increase in production. That problem faces the people of this country today not in so severe a form as 1t threatened the older countries of Europe, but, still, as great and pressing economic prob | lem. l 'In Europe this problem has been suc- cessfully met, first by reducing the cost | to the farmer of producing his crops. l and, secondly, by increasing his produc- 1 ton through the adoption of improved methods of cultivation. Both the fed | eral and state governments in this coun- try have done much to afford the farmers instruction in improved agricultural meth ods But 1t still remains for us to re- duce the cost of the farmers production | by affordinF him the necessary capital for | the exploitation of his soil upon the most advantageous terms. He must be afforded the money necessary for him to adopt improved methods. It must be made profitable for him to place every acre of his ground under cultivation This offers the consumer relief from the in- creasng cost of foodstuffs." Opposes Government Subsidies 1 President Taft strongly deprecates the 1 idea of establishing cooperative credit lin the United States through the sup | port of government subsidies.
 We must establish credit system of, | for and by the farmers of the United States" he writes. "The country enjoys