Arizona republican., 1913-06-17

say over four or five per cent and frequently not any at ali, there is no danger of speculation. It is making big profits that leads 10 risky busi- ness methods and this restriction on profits is one of tho best features of these farmers banks.
 
 When these points are considered !: becomes very clear that a farmer putting his money into one of these societies would take less risk than he would in a comm mercIal credit organ ization of the operations of which he has no knowledge. IL Is probably these restrictions that have lead the German farmers to accept the unIin- ited liability of their societies rather than any difference of character be- tween them and American farmers.
 However there are communities of farmers Tn Germany who are unwilI- Ing to accept unlimited liability. That is they will not give the society the right to sell them out of house and home although they are willing to join a society and to assume respon- abilities in proportion to the benefits which they receive. To accom- modate these farmers societies have been or ganized with a limited liability. They are found chiefly Tn the northern part of Germany. in Saxony and Pomerania where the possessions of the farmers are much more uneven than in other provinces. It Is rather unfair, in theory at least, to ask a farmer with a farm of 500 acres to pledge the whole of his farm in a society where another member would only be putting up 10 acres. Of course the big farmer would be able to borrow more than the little farmer. The way in which this difficulty has been met in the unlimited society IS to have each member buy certain numb of shares of stock. For each share he buys he assumes a certain portion of liability for the debts of the society. Also Inc is allowed to borrow up to a certain portion of his liability. Thus the big farmers, put up more money. assume more liability and receive a bigger credit with the bank. Wher- ever the farms are about of equal size there is no need to have this limited liability plan although if there appears too great prejudice against unlimited liability among American farmers this scheme could be used.
 At first most of the money the banke receive IS from loans from outside sources but as they progress and their credit becomes more firmly established the number of depositors increase and most of the business Is carried on with the money from these local deposits. In recent years over SO per cent of all the money used in these banks to furnish the farmers with short time loans came from depositors That sh ows how easily the farmers of the United States with such a system could provide for their wants As il is today even the money Of the farm CTS themselves when deposited in banks takes the route of all commer- cial deposits and finds it's way to some merchant or to Wall Street.
 The chief advantage to be brouchf to American farmers from such banks is that it would place them in con trol of a permanent source Of credit Today the American farmers have to depend upon the commercial banks. Now suppose a farmer buys manure for a field. lit can't realize a profit on that investment until the next crop is sold probably year later. If it is an agricultural !mpIemrl. or q calf or stock that -,s has bought, it will take