The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1913-09-09

short term credit pr s"ata
Be interesting fer Sou - nsar ,@T
%tcniar description - a small cs
auve bank. which -sw I'd ~e+u ID
At Aonor. Hungary
This muta.l .r.ot <o,4~i, -
fahishsd 81 Wears aSo Ard ~as "
hrst OF rs Kind p Hungary ocI-
pied a small room II a small t..id =.
which X G Tae1 The furniture III tt~
room consisted - orc tatl~ : dorm
chairs and "a small de=s This <oe.e-
= had TOO members. nesrit .a Z
whom ~ere farmers and land wn.rs
The TAI ms range In six frotU -
90 acres The operations ~ thc ~o&l.-
" were limited t. IN. suA.a vtltss.
and al area of about four n4l-.
around ne same The capital Il M
society amounted 10 IS zoe divided
into eoe shares II 500 zach and ~
liability OF "a member o~ntas . star.
was limited IL i've times The amour,
of his share. The ~divfdc-c~ or these
shares were limited ro per .nt
The bank obtained further ~p4tal
from deposits which were received
from the general public. - well IS
from members. In the event thai IN.
deposits and capital wer. not saf
ncient to meet The demands for money
the society had no froubl. whatever
IN ~discoununs It's ape At other hank
ing institutions. The loans made ~
the society were almost entTelN On
personal security. The society loan
ed money only 10 its members Tn.
rate az interest on loans was 9.ner-
ally 5 per cent. on account II IN.
great money strngency AT that tam.
in Europe, some few 81 the loans
bore interest at the rate Of Ire 80
S per cent. The total outstanding
loans by the society 10 the farmers
; 10 the neighborhood amounted 10 So
0O0. Only a small amount Of money
was kept at the bank at any 80.
! time. The balance Of the money was
e kept ont in oan for productive pur-
e poses, OF placed on deposit IN q near
by bank in the city OF Budapest. This
society had not lost d dollar ID ten
years, 1t paid 4 per cent interest On
I saving deposits 1t was examined
. twice "A year by a government IN
$ spector. The bank WAS managed hy
a president, who received no salary.
q a manager. who received no SALARY
and a bOokkeeper who was Also cltN
y engineer, and who received \ SALARY i.
about $l0O per year, and four dir.c-
" tors who received 10 per cent II 'he
n profits OF the bank. n was SO arrare-
ed that one officer of the bank was Al
70 the bank practically all the time. IN.
officers Of the bank were elected IL I.
" general assembly Of the members II
is March Of each year at which time tn
81 members voted personally. ono man
one vote, and not according To- an,
IS stock. The credit society at Mono
acted as purchasing agent for sce'
tn and fertilizers and machinery for i;
a. members. 1t owned several harvest
O. ing machines which were rented 4
n the members. The deposits + IA
rs society IL $4,000 and
had accumulated d surplus arneuuf
iy ing to Si.e0o.
~ 1t L. very plain from the .bov. -
scriDtion cf this httle credit s"cI"t
:. that its chicf purLos III life 10 loaI
money 10 It's members at the loves
ia possible rate II interest.
Now, these mutual credit socletI.
!. in Hungary, as elsewhere i'm fGrops
are far scunder institutions than ia
ronco-operaJive banks. Dut ~ Z.4f
ar cooperative banking societies III Ifln
gary. during the present fnanc,a
crisis not a single one had ITS aclx
j., ties hecke while 50 savings Dank
!, on the joint stock plan in Hungary g
.u one-tenth of the entire numhe ~ sa>
,e lngs banks IN the unit had close
rs their doors during this grea, cr,si
MI. CahIll, a great english anthnri;
ms on cooperation states that cooper
= tive societies show q maximum (
safety Failures Of ~nOnco-opera
~ tive banking Institutions are ffty-ns
Oh times as frequent as the failures Of e.
nc operativ. societies
in Land mortgage credit III f~.uropea
ay countries" says Il recent official state
IRE ment from the American Comrnissio1
Is has been organized SO as 10 place
IS collective security back Of bonds J.
ass sued by land mortgage socieites.
cd contrast with the system CIR the tni
ne ed States OF marketing indivtdu
)r- loans upon individual mortgages
!r- These land mortgage institutions ha'
I'd brought long time loans 70 Ehrdpea
a - Y-v1parS Of tho lnracf ra.n- - :. -sL
an Generally speaking. loans are mae
OF UP to 80 per cent on lands Of oep-nt
tnc able value, ard at 4 IL per cent al
these mortgages are universally col
lv sidered safe and conservative and 4
yer over europe ompare favorabiy VII
lay government fernaps q oelal
q ed description OF a single land NOR
to gag institution would be more lnte
S esting TO You than a general discu
oat sion along this line.