Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1913-05-28
vERMENr. LOANS TO FARMERS

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BY Congressman Clyde H. 3Tavenner.
:sS While the government commission is
making a learned investigation of the
forms OF agricultural credit in Eu-
rope, Representative e. r. Bathrlck,
OF, Ohio, who has been making q
study Of rural credit systems for years
has introduced in the House a bill
which seems to embody all the
essentials for getting cheaper money
for the farmer and rescuing him from
the hands of local Insurers who are
charging him on an average the
country over, more than eight per
cent, interest on his loans.
The most successful credit system
in Europe is the cooperative pan a.
dapted from the Raiffeisen banking
system Of Il Germany. & Here the 4 only
asset given to secure loans is the cor
Elective word of poor but honest men,
each man bound by the ferms OF
membership in the Raitteisens bank
unlimited liability for the debts OF
his fellow members. {. 5,
That this pledge, given under such
circumstances, is as good as a bono
in the money markets of Europe is
shown by, the fact that the society has
been able to borrow vast sums OF
money at low rates of interest, and
that losses due to defalcation have
Deen Insignificant. 5j84
But Mr. Bathrick thinks such a sys.
lem is not likely to thrive in inc
United States The same result can be
reached If the government borroWs the
money on low interest bearing bonds
and loans 1t again to farmers on the
security Of their, lands at a slightly
higher rate. .;554
The farm lands thus pledged would
be the security for the government
bonds. The government would simply
be acting as trustee for the farming
population in securing loans at .cheaI
rates. 81 IA K,
Because Of the low productive
value of the farm investm ent,' says
Mr.. Bathrick, farm loans should be
for much longer period than the av.
erage life of the present day farm
mortgage. The government alone is the
only agency now to whom the far.
mers can appeal for long term loans.
The government can easily borrow for
long periods at low rates.
lit would be necessary for the gov
erment to re-lend to the farmers at
an advance OF only half Of one per
cent, to pay all the expenses of the
system and return profit to the
Treasury besides. This profit could
be devoted to the Improvement OF
rural life.
New Zealand has been borrowing
money for farmers on this plan for
.a1 of,t % +.
ry, by making a profit Of half per
cent, made over 100000 profit. Aus
lralia has also been conducting the
same system profitably. The Austral-
ian surplus is used in building good
roads and for other rural improve
ments.
V The state of Minnesota is seeing
the light. Minnesota realized $25, 0OO,-
900 from the sale of school lands:
This money, instead OF being used to
encourage farming, was sent to the
eastern money markets to be loaned.
The state is now going about it to
get her money back for her FARMERS.
Wisconsin is also considering q
system of borrowing on state bonds
and lending the proceeds from the
bond sale to farmers at low rates.
Mr.. Bathrick thinks that cheap
er money tor farmers will result in
increased prosperity for towns and
cities. u
I; when capital can no longer exact
high rates from farmers he says,
"it will seek industry, which offers
the next highest returns. This VIII
stimulate industry, build new factor
les, and raise wages by increasing
the demand for labor,