Little Falls herald., 1912-11-22

available capital for carrying on the
farmers business is granted by every
one who has given the least attention
to the matter. But how this is to be
done is the point at which the interests
of bankers and farmers are likely to
conflict. If there is money to loan and
securities to sell the banker naturally
wants the business, and he wants the
business in such shape that it will
make him good profit. The bankers
association have taken the matter OF
agriculture credits up seriously, and
have investigated the European sys-
tens; their periodicals. are filled with
articles on the subject. It has become
so much a live issue tina: the national
political parties have included it in
their platforms, and without doubt
something will be done in the near
future to establish either public or
private institutions from which farm
ers may make loans on favorable
terms.
Unless the farmers take a hand in
this, the financial interests Of our
country are likely to shape such irstitu.
tions to suit their interests first and
the farmers interests second. Al
ready there are suggestions of large
central land bank with almost un-
limited capital for financing farmers,
of land mortgage associations with
like gigantic capital to handle loans
on farm real estate. But there are some
fundamental factors concerned in the
matter that must be observed If sys-
tenn is established that will give the
relief that is necessary and proves the
success that similar institutions have
proven in European counties.
First: Farmers must be represented
in it's management and control. The
German agricultural credit organiza-
tions, which are the best in the world,
are managed by farmers and for farm
ers. They are literally union of the
farmers for the farmers and by the
farmers. Bankers and financiers can
cooperate and assist such organiza-
tions, but they cannot do for the farm
ers what they must do for themselves.
Second: Farmers credit organiza-
tions must be on a limited liability
basis. For that reason the Raiffeissen
system which is so widely distributed
in Europe and by many advocated tor
introduction in America is not apple
able to our conditions, because the one
thing on which Raffeissen built his as
>ciation was tho unlimited liability
Of members. It was literally zone for
all and all for one.' The American
farmer will not become a member OF
an association by which he makes
himself liable for all his property.
With a peasant population such as
the one near where Raiffeissen found
ed his societies it made little difference
to the members whether they pledged
themselves for all their property OF
not, because they had nothing to lose
anyhow. But the American farmer will
not and should not willingly risk his
farm and all he has by becoming a
member Of an association which has
unlimited liability Of it's members.
Third: Farmers do not want any
subvention or subsidy from the gov
ernment. France has established he1
agricultural credit institution on the
basis of free government loans and
granted legal monopolies the privilege
Of furnishing real and personal credits
to farmers. The farmers Of America
have no need Of free loans from the
government; all that they need is to
sell their credit for what it is worth, SO
that they may borrow on as favorable
terms as other industries.
Fourth: Agricultural credit organiza-
tions should be under government
supervision. The bankers probably will
not endorse this proposition heartily.
But if the interests of the farmers are
to be protected and the institutions are
to be of undoubted security they must
be under direct government super
vision. The success Of the German
land mortgage association has been
due to the fact that it has been under
direct government supervision and in
directly government control.
Fifth: That credit institution that
serves the farmer must be close at
hand. Whether it is bank, a land
mortgage association, or whether the
farmer gets his credit, it needs to be
close at hand where he can 60 person
ally and make arrangements. For this
reason the large centralized institution
located in the cities will not serve the
purpose. The farmer needs decen-
tralized system that has. its branch
es in every township. The success Of
European rural banks is due to the
fact that they are established in the
rural communities where they are
convenient for the farmers and they
conduct their business to suit the con-
venience Of the farmers, including
business hours.
The reason the present situation Of
credit and banking facilities for the
American farmer is so unsatisfactory
is because the banking business has
been developed to suit the needs Of
the city and not the country. The