Decorah public opinion. (Decorah, Winneshiek County [Iowa]) 1895-1928, 1912-10-16


States
.a In this statement President Taft
summarizes a nation wide plan to
assist in the financing of the needs of
the American farmers, thereby reduc-
ing the cost of production of food
products and resulting in a relief to
the consumer from the high cost of
living.
In word, President Taft declares
that the farmer should be provided
with money at the same rate of in
Terest asfother lines of business.
President Taft's plan was set forth
in letter cent to all the Governors
OF the states on Friday. He urges
chat steps be taken in every state in
the Union TO bring about legislation
FOR thefcreation of state land mort
gage banks. In addition, he urges
| thef ,taAting OF a movement for the
enactment OF laws by Congress per-
mitting the organization of national
land mortgage banks, to be operated
under strict government supervision.
In this manner he proposed to put
the guarantee of the national govern
ment back of the farmers credit.
The national farm bank, according to
the Presidents plan, shall have the
power to guarantee and market the
debeneure bonds of the state land
mortgage banks or cooperative So
cieties
1t is Mr.. Tafts belief that by CO.
operation OF the state and national
gOyernments a financial machinery
can be established where the farmers
will be able to borrow money neces-
cary for the raising and harvesting
of their crops and providing for the
mortgage on aeir lands, at rate of
interest equal to that enjoyed by
other industrial and commercial in
Gerests.
The plan suggested is based upon
The principles of agricultural CO.
operative credit now in use in prac-
1ically every country in Europe. Uni
form state Legislation, in the opinion
of President Taft, is essential to the
successful adoption of this plan.
President Taft bases his recommen-
dations on reports submitted by the
American diplomatic officers in Eu-
roptA'yho have, since last March, been
engageH in an investigation OF this
question and upon the special report
of Ambassador Myron L. Herrick, who
has made a study for years of the
question of adopting co-operative
credit in the United States.
"A study OF these reports, writes
President Taft, ''and of the RECON-
mendations OF Ambassador Herrick
which l am sending you. convinces
me of the adaptability to American
conditions of the cooperative credit
plan as set forth in the organization
of the Raiifeisen banks of Germany
The establishment and conduct of
: such banks, however, are matters
for state control. | suggest, also,
the Establishment of land mortgage
banks under state charters, and the
formation Of cooperative mortgage
bond societies along the lines of the
Landschaften societies of Germany
provided that uniform state legisla-
tion; can be secured TO govern their
organization and operation.
LAS Il later step, favor the enact
ment of laws by Congress permitting
The organization OF national land
mortgage banks, TO be operated under
strict government supervision with
the power to guarantee and market
Ghe guaranteed debenture bonds OF
the state land mortgage banks or CO.
operative societies.
THE 100000 Of farmers of the
United States add each year to the
national wealth SO, 100000. They
are doing this on a borrowed capital
of 5000, 100000. On this sum they
pay annually interest charges of
$4,000, 900. Counting commissions
and renewal charges, the interest rate
paid by the farmer of this country
is averaged at 1-2 per cent, as
compared TO a rate of l-2 TO 3 1-2
per cent paid by the farmer, for in
stance, OF France or Germany.
Again, the interest rate paid by
fhe American farmer is considerably
higher than that paid by our indus
Erial corporations, railroads or NUM-
eipalities. Yet, | think, il will be adj
mitted that the security offered by
the farmer in his farm 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
ne is willing TO supply ii to the in
dustrial corporations? Obviously
the advantage enjoyed by the indus
trial corporation lies in the financial
machinery at its command, which
permits it to place its offer before
more readily negotiable form. The
FARMER lacks this machinery, and,
lacking ii, he suffers unreasonably.
This is not theory.
Through all the changing condi-
tions OF century the soundness and
practicability OF such financial ma
shinery. based upon the peculiar
credit needs of the agriculturist, has
been tried out, and so successful has
been it's operation that in Germany,
in times OF financial stress, money
has been taken out of the commercial
field and placed in the keeping OF
that empires agricultural co-opera-
tive banks for safety The value of
this assistance to the farmer receives
nnduestionable testimonial in the
growth of the system in the countries
of Europe. More specifically this ad-
vantage may be seen in the fact that