Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1912-07-25
FARMERS BANKS
THRIVE IN RUSSIA
svstem Now Covers Entire EN-
pire-Government Has Already
Put In $4O,00o,000.

President Taft has called for reports
m farmers land banks from diplomatic
representatives OF the United States In
Europe The first to be issued at WASH
,ngton comes from Ambassador Curtis
Guild at St Petersburg 1t shows how
useful and how general the financing of
farmers In Russia has become.
Washington, July 23.-Even in remote
Siberia and Turkestan the farmers CO.
operative credit system has reared a
financial fabric to assist the peasant
farmer of ne Cars domain. The state
department has just received from Ambas
sador Curtis Guild at St. Petersburg an
exhaustive report on the farmers CO.
operative credit system in Russia This
Is to be used in preparing a plan TO fit
the cooperative credit idea to American
conditions.
At the present time the Russian gov
eminent has nearly sio,00O,Oc0 Of gov
eminent money invested in the farmers
cooperative credit system.
The cooperative movement among Rus
sian peasants has now developed two dis
tinct aims: tirst, 70 educate the peasants.
large proportion of whorl are quite
illiterate, along the lines of modern farm
ing; and. secondly, to encourage them to
save tnelT edTnlIlcS anu dCuulic tHS hocie
of providing against the rainy days.
COVERS WHOLE RUSSIAN EMPIRE.
The direct ann OF the Russian gov
eminent in organizing this system was
TO relieve the peasants from the necessity
of paying exorbtant and ruinous rates
OF interest imposed upon them by their
money lenders, the rates often running
as high as co and in known cases to $40
per cent
The government has very wisely left
the management of the societies large
ly in the hands of the farmers them
selves. IT exercises supervision over the
societies through the ministry of finance.
Although instituted in 1895. the
movement has spread in Russia to in
clui 10000 farmers societies, with an
average membership in each society
of nearly 500. The network OF socie-
ties covers practically the entire i'm
mense area Of the Russian empire.
The average loan required by the
farmer in Russia does not exceed $50
and is generally employed to pur-
chase some article necessary at the
moment such as an agricultural i'm
plement or a horse, the loan being re-
paid by the farmer Immediately after
the harvest.
TWO CLASSES OF SOCIETIES.
In brief. Ambassa dor Guild reports
the Russian System to be an institu-
ton of cooperative loan societies
among the farmers, conducted und der
governmental patronage and super
vision. by which the former. at no
cost to himself. is given the benefit
of loans from his society on long time
nd NJ h.a time
is permitted to share in his society s
profits.
The loan societies are OF two classes.
the loan savings associations and the So
c.eties of small credit. They are both CO.
operative, and the aim OF each is to lend
small amounts to the farmers through
governmental assistance.
The difference between the two classes
of societies is that the members Of the
loan savings associations are obliged to
make deposits of small amount IN order
to form a reserve capital for their society
while members of the societies of small
credit do not participate personally In the
formation of their society's capital. The
latter societies are adapted to the poorer
and more sparsely settled communities.
HOW CAPITAL is PROVIDED.
When a group of 20 or more individuals
wishes to form a cooperative loan society
petition to that effect Us presented to the
government. a government inspector
then makes a personal investiga
ton of the responsibility OF the signer'
of the petition and of the value Of theil
land
Upon his recommendation the govern
mcnt grants the society a loan OF one tt
three thousand rubles $500 to $1,000 for ;
period Of 10 years, at an interest rate o
= per cent, payable annually. This LOAF
serves as the foundation capital OF tn
society. For it's working capital the Stat
bank is authorized by the government t
lend money to the society upon applica
tior.
The state bank loan is at the sam
rate Of interest as the government loaf
t. G., FIVE per cent, but Is made for
short time only, usually for ;welv
months. Besides the foundation capita
from the government and the loans fror
the state bank. the societies may obtai
other loans from banks or Individual:
usually at from six to 10 per cent ir
terest Savings deposits are received b
the societies.
The average society begins bushes
with a total capital. that is both four
Iation and working capital. of from $40
10 5000. 1t is then in a position to max
loans to Its members. who are responsb
10 the society.
Loans to members usually bear q
Interest rate OF eight per cent. to l2 Pr
cent