Arizona republican., 1913-07-19
FRENCH PEASANT TQ0NAN WITH DONKEY CART O44 ROAD ERO1T NIOPT MAR STJEAN
 D,ANGEEY

and New York brokers bidding
 against this demand in order to keen
 the wheels moving in Wall Street.
 With this double demand and an in-
 elastic currency, money at once be-
 comes tight, and if the banks happen
 to be in weaker condition than
 usual, which happens often, a panic
 IS apt to result, with a wholesale
 suspension of payments such as oc- cured in the fall of 1907. Leaving aside the question of how nearly a reform of the currency system, with
 a change in the present system of
 bankers deposits would remedy this
 evil. there is a lesson for farmers,
 considering the adapta bility of a CO., operative credit system to the United ! States. in this seasonal demand for money.
 The principal source of capital for thu rural cooperative societies. would be he deposits of the members and non-me1hbers of the community l served. However, at first. and at 1 times thereafter, the local societies would be obliged to borrow in order to meet a special demand for funds.
 
 in its financial demands as are the other industries. Most of the money is demanded at one or two seasons of the year, and most of the profits are realized by farmers at one time. Thus the local banks at certain sea- sons of the year would face unusual demands, and at others would be bur dened with an unwiedly surplusage of funds from repayments and tenn porarily increased deposits. It is as necessary to provide for these tenn porarily increased demands as it is to dispose profitably of the surpIu- sage of money.
 If we had a cooperative credit so- ciety in Florida and another in New York and still another in Kansas. although each of these societies would in turn suffer from first an excessive demand and then an ex- cess of deposits. no two of them would feel the excessive demand or supply at the same time of year. Thus the Florida society after the products of it's mem bers had been marketed could probably. and very proftably. lend it's surplus funds to the Kansas or New York societies,
  the need of extra funds until some time after the Florida farmers had realized on their crops. Carrying this idea a step further these three socie- ties could organize a central bank in which their surplus funds at certain seasons of the year could be depos- tied, and from which they could draw money when the demand in their sec- ton of the country was at its height.
 It has been pointed out that a To- gal society could expect to borrow from an outside bank or from third parties more easily and at better rates than the individual farmer. Ob- ,iously it would be as much easier 'or such a central bank as has been outlined to borrow from the outside n comparison with the local society, IS it would be for the local society n with the individual. These local banks could be depended upon to se- ,ure all funds needed over and above he deposits secured by the local banks.
 Tn any system established in the Tnited States the area of operations f a central bank would probably be state. For many IGStSOHS III bOA many there are frequently found two entral banks operating in the same erritory although no two banks serve he same society There does not eem to be any sufficient reason. how yer, for such a duplication in ewly established system. Variations l type among the local societies does ot demand separate central lnstltu- ons The Raiffeisen system in Ger lany, it must be remembered. was ell on it's way before the other so- eties began to appear in sufficient umbers to warrant the establish lent of central institutions. The erman Agricultural Central Loan ank was stabHshed by Raiffeisen efore the Imperial Cooperative ank had existence and Raiffeisen ecepted as members of his central stitution only those societies ac- ,pting his creed throughout.
 It Is probable that in an American stem, the difference in type of the cal societies would be by states or sections If indeed there must be ch difference. There might be for societies of low share cap Il and unlimited liability in the 'uth, and societies of limited liabil- 7 and large share capital in other ctlons of the country. In so large country each state central bank 'uld probably have to be an inde- ndent institution and these in turn uld support an "equalizing" main ntral bank. probably in New York.