The Clio messenger. (Clio, Mich.) 1907-current, 1913-09-19
ANCIENT FARM PLAN
FOR COOPERATION

Florence. Italy.-At the beginning
OF its Investigation Of cooperative
banking societies the American COM
ission oh agricultural cooperation.
1embled by the Southern CONNER
"A congress, had the advantageous
experience of first visiting a part of
Europe where cooperative banks had
not made much headwuy.
Agricultural cooperation Is prac-
dced In only one form In the country
about Florence-societies for the pur-
chase Of agricultural machinery, fer
tilizer. seeds, etc. This Is chiefly due
to the fact that In the early days the
merchants of Florence were the land
owners, and their estates were farmed
on a share basis by the peasants.
II crops were bad the landlord fur.
nished food for the peasant farmer
until the next harvest. This system
OF land tenure still prevails. and study
OF the systems near Florence has
shown the commission that coopera-
tive credit institutions are only possi-
BILE where the need is great.
Comparing Italian conditions with
American, one Of the Florentine ex.
perts who appeared before the COM
mission suggested that in the United
States the solution OF the problem Of
farm finance might be found In an en-
iargement Of the operations Of exist
Ing banks. Sig Martelli, president of
the Savings bank of Florence, de-
scribed practice common with banks
about Florence whereby the farmer
gives a mortgage to a bank and re-
ceives in return an open account for
certain amount of credit Thus
farmer who considers that he needs
a credit of $4,000 to operate his farm
gives mortgage for that amount to
the bank. AS he needs the money
he draws on the bank. He pays In
terest only on the amount on which he
borrows.
Tor the longtime loans Of the farm
ers the savings banks are allowed to
invest up to 80 per cent. OF their de-
posits in farm mortgages. These mort,
cages are OF two classes-for periods
up to ten years and for periods of
from 10 to 80 years.
The shorter-term mortgage loans are
repaid by the borrowers In one lump
sum, as In the United States, but
the longer-term loans are repaid by
amortization-that Is, small annual
payments made upon the principal Of
the loan. The banks are only per
mitted, to, charge borrowers one-half
~ ~ / moro than they are required
to }n.y depositors. At the present
tine the prevalent rate Is Ave per
cent. though generally 1t Is four per
cent. Money is only loaned up to so
per cent. of the appraised value Of
the land.
There Is also a mortgage bank In
Florence. the Monte di Paschi. found
ed by one of the early dukes Of Flor
ence. This bank issues mortgage de-
bentures at three and one-half. four
and onehalf and Ave per cent Most
Of the debentures now outstanding
are at i've per cent. They sell q
tribe under par. which Is the usual
condition In Italy. and their market
price compares favorably with gov
ernment bonds.
The cooperative societies for pur-
chase among the land owpers have
been successful. The farmers them
selves do not belong to these socie-
Ties. but the landowners do all pur.
chasing Of farm machinery and fertil-
fxer. These societies are also active
IN educational work. and maintain as
ricultural experts. who travel about
from village to village instructing the
farmers in scientific agricultural
methods.