The Birmingham age-herald., 1913-06-24

made only to members, although deposits
are received from outsiders who are not
members. These small banks are under
the direction of the parish priest, who
gives his services freely to the institu-
ton There is very ktle capital paid
in and no dividends are ever paid on
stock.
The profits of the bank go to swell
the reserve fund and thereby increase the
capital for loans to the farmer men,
bers. The expenses of operation are
practically nothing. A large number or
these small rural banks in a province will
be federated in a central bank, and this
bank has connections with large savings
banks or the Italian bank of issue, 80
that ample funds can be secured at all
times for loans. The most impressive
fact in connection with these small banks
is that there are no records of failure
either on the part of the banks or failure
to collect loans made to borrowers.
The system of security is the unlim-
tied liability of all the members for
every loan made to its members or loans
sec ured from the central bank. These
banks are not operated for profit but as
mediums for enabling small farmers to
secure cash funds to operate their busi-
ness with. The full details and par
ticulars of the organization and operation
the report of the federal commission to
Congress, and in the reports of the Amer
ican commission to the various states
There are also small Independent banks
of the Raiffeison type, but they are
not so numerous or popular as the above
described confessional banks.
The rate of interest charged the far
mers loans is 5 per cent per annum,
while the rate paid on deposits is per
cent.
Land Mortgage Banks
We are also making careful and full
report on the large land mortgage banks
which enable land owners to secure
money for long periods of time usually OF
from 40 to so years. These loans are
made on the amortization plan, the
gradual payment of the principal with the
interest semi-annually so that at the end
of the period for which the loan was
granted the entire debt is extingushed.
These loans including interest and
amortization are from to per cent per
annum. The loans are usually granted
upon a basis of so per cent of the mar
6et value of the land given in the mort
gage as security. Against the mortgages
bonds or debentures are issued and sold
in the open market to investors.
The government gives aid in various
ways to the establishment of land mor.-
They are conservatively managed. largely
from an altruistic standpoint, and are
sound safe and solvent institutions.
Our present tour will take us through
the countries of Hungary, Austria, Ger
many, Belgium, Holland, Denmark,
France, England and Ireland. returning
to the United States from Queenstown
July s. Every facility for studyiys and
investigating every department of farm
life, including rural credits. cooperative
marketing and production is being Of
feIed by the officials of the governments
we are visiting. 1t is hoped that the
reports of our commissions Will contain
much valuable information which can
be utilized to the benefit of American
agriculture.
The European farmers can teach us
many lessons of value and we are here
to learn ad to give the results of our
studies back to the PEOPLE of the United
States. Very truly yours,
HARVTE JORDAN,
Vienna, Austria, May 30. 1919.