St. Johnsbury Caledonian. [volume] (St. Johnsbury, Vt.) 1867-1919, 1912-12-18
Aericuitural Credits

The matter of farmers cooperative
banks and agricultural credits sug-
gested by Pres Taft is receiving
much attention throughout the
country. What If anything will be
evolved from the discussion OF the
subject is hard to tell. George Wood
ruiz. president of the Woodruff
Trust Company of Joliet, Ill., an
institution formed to operate along
the lines of the Credit Froncier de
France, passed a part of last sum
mer in Paris working with Ambas-
sador Herrick in investigating the
French system and has written an
article for Moody's The Investors
Magazine. He finds that the agrl-
cultural credit systems in Europe
consist of privately owned and CO.
operativeIy owned personal credit
banks and mortgage banks. The
personal credit banks make short
time loans to the farmers and the
mortgage banks, the long time
loans. The interest rates to
European farmers are not so low a.
reported but generally range
from "A to so. He is convinced
that our present banks could well
care for the short term credits pro-
vided a national reserve association
of some kind could be found
and banks should be formed
to care for the long term
loans. Speaking of the mortgage
banks he says:
"a. mortgage bank, whether ma
tional or state, privately owned OF
comparatively owned, should be sub
ject to the supervision and exam
nation of either state or nationa
authorities, should be organized
with ample capital or responsibility
should loan money exclusively upon
real estate, and in order to secure
the money to loan, should issue and
sell it's bonds secured by mortgages
as collateral.
'The success of the bank will de-
pend largely upon the two things
that have contributed most to the
success of foreign banks: First
Amortization provisions in the
mortgages, and second, Restrictions
around the bonds.
I'm America, such loans as are
made on farm lands should be made
for not to exceed 5O% of the value
Of the land and preferably for a Pc
riod of 80 years, each loan to be
paid back to the bank in small semi
annual payments. This system Of
small payments constitutes what is
known as the amortization plan Of
operation. AS under this plan the
loan will never have to be renewed
but will continue to run until the
semi-anual payments have cleared
the farm of debt, the farmer will
never be compelled to pay the fire.
Quent commissions, expenses OF
bringing down abstracts, and legal
charges which he is now compelled
to pay every few years when the
loan is renewed, and more import
ant still, he will be largely relieved
Of any anxiety lest he fail to meet
the mortgage when due and lost
the farm, for under this plan of am
irritation loans it will be practically
impossible for an honest farmer t.
lose his farm"
Secretary Wilson in ihis annual
report gave some Interesting in
formation concerning couditionI
among American farmers. He found
that about three-fourths of the farm
owners in the country and abou
one-half Of the farm tenants were
able to give good security for loans
About half of the farmers are abb,
to secure loans needed and abou
one-third of them would use loan.
conservatively if they could secur,
them. Nearly half of the cotton pro
ducers give crop liens on their croI
but only one-fourth of the farmer,
raising other crops do so. Abou
the same proportion place persona
PASPSAeJ AHoA N5@6SS Va NASh AN'
stock. Local banks supply NOR,
than half OF the agricultural credi
now, general stores one quarter anC
the rest Is supplied by neighbors o.
loan agents. The interest rates OF
the bulk Of the purchase money fol
farms ranges from to so and IL
over half the country there IL M