The citizen. (Honesdale, Pa.) 1908-1914, 1913-07-29
Medieval FARM
system IN ITALY
Near Florence Tho Peasants
Work on Shares.
EASY TO OBTAIN CREDIT.

Merchants Are the Landowners and
When Crops Are Bad Furnish Food
For the Farmers Until the Next
Harvest - Commission investigating
Cooperative Credit institutions.
The American commission on agri-
cultural cooperation, which recently
began an investigation of the co-opera-
five banking societies Of Europe, made
their initial inquiries in Florence, TIA
ly, and they had the advantageous ex-
pcltence of first visiting part of Eu-
rope where cooperative banks had not
made much headway.
Agricultural cooperation is practiced
in only one form in the country about
F'lorence-societies for the purchase of
agricultural machinery, fertilizer, seeds,
etc. This is chiefly due to the fact that
in the early days the merchants of
Florence were the landowners, and
their estates were far1ned on share
basis by the peasants. If crops were
bad the landlord furnished food for the
peasant farmer until the next harvest.
This system of land tenure still pre-
walls, and study Of the systems near
Florence has shown the commission
that cooperative credit institutions are
only possible where the need is great.
Comparison Of Conditions.
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-
largement of the operations of exist
ing banks Signor Martelli, president
Of the Savings Bank of Florence, de-
scribed a practice common with banks
about Florence whereby the farmer
gives q mortgage to a bank and re-
ceives in return an open account for a
farmer who considers that he needs a
credit Of $4,000 to operate his farm
gives a mortgage for that amount to
the bank. AS he needs the money he
draws on the bank. He pays interest
only on the amount which he bor-
rows.
For the long time loans Of the farm
ers the savings banks are allowed to
invest up 10 80 per cent Of their depos-
Its in farm mortgages. These mort
cages are of two classes-for periods
up to ten years and for periods Of from
ten to thirty years. The shorter term
mortgage loans are repaid by the bor-
rowers in one lump sum. as In the
United States, but the longer term
loans are repaid by amortfzadon-tha
Is, small annual payments made upon
the principal OF the loan. The banks
are permitted to charge borrowers
only one-half per cent more than they
are required to pay deposttors- At the
present time the prevalent rate Is 5
per cent, though generally II is 4 per
cent Money Is loaned only up to 30
per cent of the appraised value of the
land.
A Mortgage Bank.
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 deb
entures at 3h, AZ and per cent.
Most Of the debentures now outstand-
ing are at per cent. They sell a tri-
fle under par, which is the usual con-
dition In Italy, and their market price
compares faVorably with government
bonds.
The cooperative societies for pur-
chase among the landowners have
been successful. The farmers them
selves do not belong 10 these societies,
but the landowners do all purchasing
These societies are also active in edu-
cational work and maintain agricul-
tural experts, who travel about from
village to village instructing the farm