Arizona republican., 1912-07-22
COOPERATIVE CREDIT
 SYSTEM WORKING WELL
Continued from Page D.

and longer time He would require
 his loan, not so much for the mo-
 ments eXigency. as for the gradual
 development of his property.
 l In brief Ambassador Guild reports 1 the Russian system to be an institu- 1 ticn of cooperative loan societies 1 among the farmers. conducted under | governmental patronage and super | vision, by which the farmer at no | cost to himself. is given the benefit
 Of loans from his society on long l and easy terms, and, at the same
 time, is permitted to share in his
 soCiety's profits. The loan societies | are of two classes-the loan savings
 associations and the societies of l small credit. They are both CO., | operative, and the aim of each is to 1 lend small amounts to the farmers l through governmental assistance. The l difference between the two classes of 1 societies is that the members of the 1 lean savings associations are obliged l to make deposits of a small amount 1 1n order to form a reserve capital | for their society. while members of | the societies of small credit do not | participate personally in the forma- | tion of their societys capital The | latter societies are ada pted to the poorer and more sparsely settled l communities
 1 The management of all the soCi- | cities is placed under the control of l the ministry of finance and is di- 1 reCtly supervised by a department of i the state bank When a group of 1 twenty or more individuals wishes to 1 form cooperative loan society a pc 1 tition to that effect is presented to | the government A government in | srectOr then makes personal in
 vestigation of the responsibility of
 the signers of the petition and of 1 the value of their land Upon his | recommendation the government l grants the society a loan of one to 1 three thousand rubles ($500 to $1500) 1 for a period of thirteen years, at an | interest rate of per cent payable
 annually This loan serves as the
 foundation capital of the society.
 For it's working capital the State | bank is authorized by the govern
 ment to lend money to the society
 upon application. The amount of the | | upon the number of members in the
 society. their aggregate wealth, etc, 1 but is not restricted to any one 1 amount. and generally varies from
 between 5000 to $500 and $25,000 to 1 $50. .000
 The State bank loan is at the same rate of interest as the govern 1 ment loan-i e.. per cent-but is
 made for short time only. usually for twelve months Besides the | foundation capital from the govern l ment and the loans from the State l bank. the societies may obtain other | loans from banks or individuals. usu- l ally at from to 10 per cent inter 1 est Savings deposits are received by l the societies. The average society | begins business with a total capital | that is. both foundation and working l capitaI-of from $4000 to $6000. It is | then in a position to make loans to | it's members, who are responsible to 1 the society.
 1 These loans are of three kinds: CD Those used for current expenses l for term of not more than one year: @ those used for the pur | chase of agricultural machinery, 1 horses, etc. up to three years; and 1 C3) those used in agricultural i'm provements. irrigation works, etc. l which run. generally. for five years. | Loans to members usually bear an | interest rate of 8 per cent to F per | cent on the small loans. up to $50, | no other guarantee is required of tho | borrower than his personal word or l that of another responsible individ- ual Where security is given on the | land or the farm products of the | debtor the farmer may borrow as I high as $500. In case of failure of | crops or other misfortunes coming to | the borrower an extension of time | Is granted him in which to repay his | loan. and when the harvest is not | good in any district the State bank l will also extend the same lenienCy to | the society for the repayment of it's | lean.
 | In the societies of small credit the 1 initial loan from the government. | made for 13 years. is repaid by re ! serving SO per cent of the society 1 net earnings as a reserve fund This is done only in times when the so- ciety has had a prosperous year. but l so far. prosperity for the societies has proved almost the inVariabie l rule In the same way the loans say ings associations put aside ID per
 cent for the repayment of loans. and
 g dividend not exceeding to 10 per cent, is then paid to its deposltors.
 Hire a little salesman at The Re-
 nuhlican office. A Want Ad will see
 more customers than you can