The Washington herald., 1913-05-25

within a restricted area, who pledge
their worldly goods in common as Sc
curity for whatever liabilities the ASSOC
business and 1t probably would be at
once contended that it would be ridicu-
lous to suppose that the American farm
ers could be gotten to pledge their goods
and lands for the debts of any other
man. But in actual practice this is not
unreasonable and .very seldom disastrous
Certainly the benefits obtained are
greater in proportion TO the risks as
sumed than is the case in ninety-nine
out Of hundred business ventures
which many American farmers might
easily be talked into. In the first place,
everything about the cooperative credit
society except tho liability of the mem
bers is limited and restricted by IRON
bound rules. The members of any one
association must live within a district OF
small enough area so that every member
knows every other member and can keep
an eye on what he does and spends.
Then the borrower from any one of these
associations is restricted as to the pur-
poses for which he can spend the money
he borrows. He must put IL into i'm
provements or purchases of implements
or stock that are intended to better his
IdFUl ana increase MS
farmer is obliged to tell the bank di-
rectors just what he intends to spend
the money on before they will let him
have il. Now think of these things. a
farmer says that he wants to borrow
$40 to buy fertilizer for a certain field.
How long would II take his neighbors,
each one of whom knows that he has
borrowed his money and for exactly
what purpose he has borrowed II, to find
L h.Ns ~ far
tilizer. but had bought A graphophone
instead or taken a trip to town? Not
longer than it takes to say Jack Rob
;nson. And then the community would
be down on him like ton of bricks.
The idea of unlimited liability. of max
ing yourself liable to have every stick
you own sold to pay some one else's debt
sounds like a terrific thing. But when
you get down to the facts of the case
the important point is not how far the
members of the society are responsible,
but what risk there is Of borrower
running of with money or not repaying
his loan, The chance of this in the rural
banks is far les than in many commercial
banks. In the first place the men who
lend the money know their man per-
fectly. Then just for extra safety they
get two other men whom they know
equally as well to stand sponsor Tor him.
Then they make the borrower promise
in black and white that he is going to
do sensible thing with his money. Then
they go around to his farm and watch
him until he does it. If he doesn't do
It they will know it long before there
is any chance of his making getaway.
And no one loan is ever so large as to
threaten the safety of the bank.
Besides this form of strictly rural bank
there is what Is known as the popular
bank which, however, is designed more
particularly for artisans living In urban
communities. but which is also OF great
value to the farmers These banks have
capital. Each member has to subscribe
to stock and dividends are paid on this
stock. Also the members are only liable
to a certain fixed extent for the debts
of such a bank. Theoretically this form
of bank would seem the more tempting
one with which to become associated
As a member you would not be liable
to SO great an extent and you would
also draw a dividend from the profits
of the bank. However, in actual prac-
tice the first type of bank has been found
to, work better in Italian rural COM
munities.
The above Is brief outline of the as
socistions which the commission found
in operation in Italy. There Is consid-
cradle amount Of business method and
judgment necessary to the conduct of
such an Institution, and their successful
operation in Italy speaks well for the
native intelligence Of the Italian peasant
farmer. And through the adoption OF
the cooperative credit system the
farmers have become used to co-opera-
ton in other ways. Now they have taken
II up in education. in purchasing and
selling their produce.
Slowly but surely the principle Of CO.