Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1912-08-08

President Taft has been engaged for a considerable period
in promoting two plans of aiding in the development of our
rural communities. One of these, which we discussed at length
the other day, is the cooperation of the federal department OF
agriculture with the different States in furnishing farmers
actual object lessons in practical advanced farming looking to
increased productiveness of the farm. This is in line with
what Hon. Allen NJ. Fletcher has proposed on the part Of the
State of Vermont, and with the federal and Vermont authori-
ties and the State agricultural college working together. there
is no question regarding what can be accomplished in this
State during the coming two years.
The other project for the development of our rural COM
munities which President Taft is seeking to promote is the in
troduction into the United States of the cooperative credit system
for farmers which has been so successful in various foreign
countries, particularly in Germany.
The system of rural credit in Germany has accomplish
ed wonderful results for the German farmers. Some idea of
the desirable features of the system may be gained at a glance
by considering the fact that the business of one year done by
the farmers of Germany aggregated the enormous sum Of ST.
6~34.26s,9S9. The large volume of business was transacted
without mortgages and at a rate of interest of 5 per cent. a
Inasmuch as the system is in operation in other European
countries equally satisfactory results might be shown in other
ence to i as' ,don tine purposes IN t%s 1 or saaa St. ~ ne is system warnin with n re Gsr.
many will answer our purpose.
We have hitherto emphasized the fact that governmental
aid for our farmers, State and national, has heretofore had ref
erence almost exclusively to increased production, leaving the
tation, commerce and credit. The farmers of Vermont as we'll
as of other States have male no advance worthy of mention in
the matter of agricultural credit.
The three principle systems of cooperative rural credit in
Europe are: First, the Raiffesen system: second, the Schulze-
Delitsche system; third, the Landschaften and Ritterschaften
The Raifeisen is a system of personal credit. The farmers
of a locality form a cooperative society. and, on the strength
of their collective assets, obtain a loan for which they become
severally and jointly liable. This is the unlimited liability
plan. ms loan lis then deposited IN the cooperative DanK OF
the association, which also acts as p deposit bank for the saw
ings of members, and the money is loaned out to the members
for specified purposes connected with the business of their
farms. These little local banks in Germany have federated
into central banks.
The Schulze Delitsche is a. somewhat similar system. but
the capital is obtained by shares, subscribed by the members
of the cooperative association. and by the members deposits:
In some countries this system works on the plan of unlimited
liability, and i'll others on the plan of limited liability.
The Landschaften system is a system of land credit. The
farmers form into cooperative societies. syndicating their in
dividual assets. their farm-lands, into a negotiable bond which
they offer as security for the credit they require. This plan
has been in operation in Germany for 10 years, and has been
able to secure for its members sufficient credit and at a rate of
interest far lower than that paid in countries and districts
where this system of cooperation does not yet exist.
For various reasons the Raifeisen system first named has
commended itself to the administration as best adapted to the
a banking agency that puts his dollar on a par with that of
the merchant whose system of credit gives his dollar multiplied
strength.
The range of operations of each local bank is limited anil
inasmuch as a member is a neighbor of every other member
the danger of squandering is practically eliminated.
The cooperative movement is not conducted for a profit
and the cost of operation is reduced to a minimum. most Of
the managers giving their services for the honor of being en-
trusted with this responsibility
While the bank is not organized for profit, but as simply
a cooperative institution. a small profit that accrues is carried
to a reserve fund, and the aggregate of this reserve through
out Germany has helped the rural banks to become a mighty
financial power back of the German farmer.
In far too many cases the young American farmer starting
out in life is liable to become the victim of some loan shark.
assuming a liability which handicaps his efforts tremendously
and hangs over him during much of the earlier part of his
career.
An abundance of cheap capital and ease of securing credit
are as important for the farmer as for the merchant or the
manufacturer, but owing to various conditions that have arisen
it has become exceedingly difficult for the Vermont farmer to
secure the capital necessary to begin business for himself under
favorable conditions.
The legislation advocated by Hon. Alen NJ. Fletcher will
go a long way in this direction, but the rural bank system adj
vocated by President Taft would supplement this movement
and result in marked benefit to our farmers.