Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1912-10-12


writes President Taft, my conviction
Of the Importance of this subject
would impel me 10 invite you to q
conference at a still earlier date"
BASED on REPORTS.
President Taft bases his recon-
mendations on reports submitted by
the American diplomatic officers in
Europe who have, since last March,
been engaged in an investigation of
this question ana upon the special re-
port of Ambassador Myron T. Her
rick, who has made a study for years
of the question of adopting coopera-
tive 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 adaptabi-ity TO American
conditions of the cooperative credit
plan as set forth in the organization
of the Raiffeisen banks of Germany
|. The establishment and conduct of
such banks, however, are matters for
SNhNS NOiA'AO ouSSSSAs dlSts NliG
establishment of land mortgage banks
under state charters, and the forma-
ton of cooperative mortgage bond So
cieties along the lines of the Land
schaften societies of Germany, pro-
vided that uniform state legislation
can be secured TO govern their organ
ization and operation. AS a later step,
I favor the enactment of laws by
congress permitting the organization
of national land mortgage banks, TO
be operated under strict government
supervision with the power to guar
antee and market the guaranteed de
benture bonds of the state land mort
gage banks or cooperative societies
recommend for your consideration
the report and recommendations OF
Ambassador Herrick, now published
by the department Of state for gen
eral distribution.
On BORROWED CAPITAL.
The 100000 of farmers Of the
United States add each year to tbs
national wealth S8,4O0,00OO00 They
are doing this on a borrowed capital
va rVs'1VrbpysNON. CI llllS SUN lliG
pay annually interest charges of $50,
100000. Counting commissions anG
renewal charges, the interest rate
paid by the farmer of this country is
averaged at eight and one-half pc
cent, as compared 10 a rate Of foul
and one-half 70 three and one-half PEI
L. cent paid by the farmer, for instance
of France or Germany.
again. the interest rate paid b!
. the American farmer is considerabl!
higher than that paid by our indus
} trial corporations, railroads, or mUnic
qualities. Yet, | think, it Will be ad
mitted that the security offered by thu
farmer in his farm lands is quite a.
/ sound as that offered by industria
, corporations. Why. then, will not tn
investor furnish the farmer with mon
ey at as advantageous rates as h
is willing 10 supply it to the indus
trial corporations? Obviously. th
, advantage enjoyed by the industrial
corporation lies In the financial ma
chinery at its command, which pei
mits It to place its offer before tn
| investor IN a more attractive an
) more readily negotiable form. Tn
: farmer lacks this machinery, and
lacking II. he suffers unreasonabl!
! This is not theory.
But the advantages to gained b
!. the adoption Of this plan go beyon
the direct saving in interest charge
to the farmer. The great necessit
which prompted the establishment
: and extension Of this plan throughou
Europe was that of checking the raj
idly advancing increases in the cos
Of foodstuffs. brought about by III
inevitable increase in consumptio