The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1912-12-31

to insure full supply of h-.tS and
the sanSuine incorDorators Went L. tht.
banks to borrow the
needed capital. 1t was here that
they ran against that vague and neb-
uious, and Yet powerful influence W.
americans have denominated the
money trust The directors in the
great banks We're also, some OF them.
directors in the sugar trust They
didnt want rival factory started 81
they refused TO lend the money 1t.
happened, however that one of tn
leading farmers was cousin to q rich
German capitalist. and he furnished
the required capital.
The cooperative credit societies in
Denmark differ rather notaDiN from
those In most other European couu-
tries. Credit unions exist these not
lendlng money directly, but furnish
ing the borrower Credit Union bonds
which he can sell in the open mar
ket for WhateNer~ he can realize on
them.
For example. suppose a Dane has
Iarm ana residence. From pop
ular type of Credit Union he can bor-
row three-fifths the value of the
house, or one-half the value Of the
iand, up to maximum limit Of
$1,2S6. Suppose he should be en-
titled to borrow $1,000. Then the Credit
Union upon taking his mortgage in
stead of paying him 81 600 in cash,
turns over to him its four Der cent.
sta guaranteed bond for $1,000. He
sells this for whatever he can get for
lt--somethlng less than par, depend :
ing upon the state OF the money mar
ket Then he pays two per cent
70 reserve fund. and after that
pays four per cent interest 4 Year,
and one per cent. extra as discount
or sinking fund. this i've per cent. a
ear-oo year-paid each year Tor
TIA years. eNtingulshing the loan. OF
=, il he wishes to pay off earlier
a. z<, do 50. IN this case suppose
the N o in bonds should sell Al %.
then L : borrower would get $3.50 in
ALL But he would be bound to the
bank for a full $1,000, which would
| mean II effect simply that he paid 4
premium of $50 to get : 900 on such
Favorable terms.
The Raffeisen plan seems u me
much better. The members of these
Credit Unions borrow on their joint.
several and unlimited liability: but il
is said there have been no losses for
50 years, and the two per cent. re
serve fund would certainly seem
ample insurance against any trouble
of this kind
Necessity Of Inspecting Books
Thoroughly.
! In most ways, as the reader has
probably come to believe. the Danish
( cooperative societies have been Very
businesslike, but IN one respect they
1 have been unacCOuntably rernlss. IT
4 many cases they have neglected T.
! employ skilled or professional audi
] tors to examine their books, and ap-
parently have neglected 10 obtain
adequate bonds from some hisf
! officials we are a sort Of trusting
! confding people, Mr.. Monrad said
| to me. - suppose that is the rea-
son Or. Cook chose Copenhagen as
1 the place from which to herald his
I North Pole story At any rate thf
! Importance or requiring absolutely
! thoroughg going inspection has been I'm
! pressed upon the Danish co-operator'
in such a manner that they are no
likely to forget ii again. \ "higt
! finanCier" lawyer and an all-Touna
Jolly good fellow got into the gOoC
! graces Of the farmers, got himself ap
pointed to some responsible position
I where he handled a lot OF the farm" rs
/ money; and soon began spec ulating
When the auditing board would com.
around he would wine and dine them
| wind up with an invitation Now
| let's look over the books and see how
\ much | have been stealing. and tn
| members, not being professional book
| keepers, nor as strict as they shouIf
! have been, would 80 away ana ftpol
everything al right-untN one d#.
the crash came. and il WAS discoEere'
that the daring plunSer had rothe,
the credulous co-optratorS of SeNtrst
fortunes \oW the Danish farmer
are beginning To employ prof eSsiot1i
auditors for the examination 81 = T
accounts. just as the Irish farmers 4.
and as the German cooperative 50
cieties are required to do by law
Why Danish Co-Operation Ita- sue
ceeded.
\ sort Of summary may RON ~
finappropriately conclude our s-or= Q
Danish agricultural cooperation:
i i. There is no doubt about II tha
its success Is mainly du- t. tn" "a