The Bourbon news. [volume] (Paris, Ky.) 1895-19??, 1913-07-25
ANCIENT FARM PLAN
Agricultural Go : operation as
Practiced in Italy.
Merchants Near Florence Are Still the
Landowners and Peasants Work
on Shares-Landlord Sustains
His Tenants.

Florence, Italy.-At the beginning
of it's investigation of cooperative
banking societies the American COM
mission on agricultural cooperation,
assembled by the Southern CONNER
cial congress, had the advantageous
d; experience of first visiting part of
Europe where cooperative banks had
not made much Roadway.
Agricultural cooperation is prac-
| ticed in only one form in the country
| about F1orence-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 we're farmed
on share basis by the peasants.
If 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 co-opera-
tive credit institutions are only posst-
BILE where the need Is great
Comparing italian conditions with
American, one Of the F1orentine 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-
larGerneht Of the operations of exist
ing banks, Sig. Martell, president of
the Savings bank of Florence. de,
! scribed q practice common with banks
about Florence whereby the farmer
gives mortgage to bank and re-
ceives in return an open account for
certain amount of credit. Thus a
farmer who considers that he needs
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 in
terest only on the amount on which he
! borrows
For the longtime loans of the farm
ers the savings banks are allowed to
invest up to so 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 leans 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
per cent. more than they are required
to pay depositors. At the present
time the prevalent rate is five per
cent, though generally it 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 one-half and five pei cent. Most
of the debentures now outstanding
are at five per cent. They sell a
tri1e under par, which is the usual
condition in Italy, and their market
price copp:.ppaaFfe favorably with gov
eminent bonds
The cooperative societies for pur;
chase among the land owners have
been successful. The farmers them
selves do not belong to these socie-
ties, but the landowners do all puf-
chasing of farm machinery and fertil.
izer. These societies are also active
in educational work, and maintain ag-
ricultural experts, who travel about
from village to village instructing the
farmers in scientific agricultural
methods.