The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1913-06-08
R0X0G

say over four or five per cent. and
frequently not any at all, there is no
danger of speculation. 1t is maxim g
big profits that leads to risky bust
ness methods and this restriction on
profits is one of the best features
of these farmers banks
When these points are considered 1t
becomes very clear that a farmer
putting his money into one of these
societies would take less risk than he
would in a commercial credit organ
fzatton of the operations of which he
has no knowledge. It is probably
these restrictions that have lead the
German farmers to accept the unlim-
tied liability of their societies rather
than any difference of character be-
tween them and American farmers.
However there are communities of
ia mers in Germany who are unwill-
Ing to accept unlimited liability. That
is they will not give the society the
right to sell them out. of house and
nome although they are willing to
join society and to assume respon-
slbllities in proportion to the benefits
which they receive. To accommodate
these farmers societies have been or
ganized with limited liability. They
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 number of
shares of stock. For each share he
buys he assumes a certain portion of
liability for the debts of the society.
Also he 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 a prejudice against unlimited |
liability among American farmers this |
scheme could be used.
At first most of the money the banks
receive IS from loans from outside /
sources Dut as Iney progress and their |
credit becomes more firmly established
the number of depositors increase ana
m ost of the business is carried on with
the money from these local deposits
In recent years over 80 per cent. of
all the money used in these banks to
furnish the farmers with short time
loans came from depositors. That
shows how easily the farmers of the
United States with such a system
could provide for their wants As it
s today even the money of the farm
srs themselves when deposited in
banks takes the route of all CONNER
cial deposits and finds it's way to some
merchant or to Wall Street.
The chief advantage to be brought
% American farmers from such banks
S that it would place them in con-
rol of a permanent source Of credit.
Today the American farmers have to
depend upon the commercial banks
Now suppose a farmer buys manure
or field. He can't realize a profit
IN that investment until the next crop
s sold probably a year later. If 1t is
IN agricultural implemcn- or a calf or
Itock that he has bought. 1t will take