The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1914-03-10

~ by the gathering I'D of smou
amounts the S13,e 600 referred ia ahoya
Where is the $1,000 or the amount ~
De obtained on the securities of the
association 10 come from? At frs,
my ldea was that this could he oh
tanned from trust Companies vs.,
ance companies, n other h~nancial
institutions; but the item of interest
ana long time furnish the trouble
along this line. The money obtained
by a deposit OF the securities shoI,1S
De oDtained at 1 per cent at least be-
low n rate at which the association,
makes it's loans, and better at 3 mar
cent. something could be done along
this line, 4 am sure, but whether to
the extent necessary or not I conld
hardly say.
In studying the plan OF your re-
serve banks 1t has seemed to me that
this principle could be applied to heIn
the farmers in their rural credits lust
as &c mas been planned to help the
commercial world through their
Oahks. Reserve banks; why not rural
cre0it reserve associations. The To-
cal association could furnish the
FUNDS necessary to organize the re-
serve association under such rules.
regulations and safeguards as the |
Government saw fit to establish The
reserve association could furnish the !
funds on the securities Of the local
associations with such aid as you and
your associates could devise for the !
Government to furnish.
As To Financial System.
1 would not presume to outline the
system necessary. m
OF your honorable body, with the aid
OF your treasury department certainly
could do this. Two per cent govern
ment bonds would furnish the funds
TO De through these reserve
associations at say 3 per cent to the
association. The / per cent could be
laid aside by the government to make
a special fund to cover any coDtin-
gency that might arise. The reserve
association could lend to the local as
ISOLATION at say 4 per cent and the 10
cal ASSOCIATION to its shareholders at
5 per cent. Indeed, the rate of inter-
est charged by the reserve association
WOuId not make very much difference,
as the reserve association would be
owned by the local association who
would get the profits and in turn dis
tribute 1t themselves with the profits
earned by them TO their shareholders.
There would be no graft, or middle
men, and all profits would find their
way back to the individual share
holders Of the local associations scat
tered in the different farming dis
tricts.
+ To SUMMARIZE; the suggestions are
oP' AIN piiiNlP1OS VI lie OlllO-
ing and loan association to the use of
the farmers under what l have been
pleased to term Land and Loan Asso-
Citations. Then, to help these asso-
Citations by the application to them
} OF the principle of the reserve banE
in establishing what would be known
as a Rural Credit Reserve Association
, The local association would furnish
( Tor the formation Of the reserve asso-
citation whatever funds were deemed
, necessary by the government for this
purpose. The whole plan is workable
: and does not interfere with the work.
3 ing Of any Of the other plans proposed
while having the advantage Of helms
y solely for the benefit Of the share,
t holders in the rural districts, and Q
being run at the lowest expense ratio
with the most profit to the farmers
/ and at practically no risk to the gov
eminent for whatever they might I'm
dertake to extend in the way of aid
: In this way the farmer can get none.
on his real estate through his loca
association, whose directors know hi
and and it's value; and thus there j
n eliminated the expense to the govern
It ment incident to the keeping Of
large force Of employees TO inspec
and pass upon the value, title, etc
of small tracts Of land throughout tn
s country. While this plan would no
L u SSA
9 government or the associations to tn
farmer Immediately it would have tn
al advantage Of giving him the aid, ex
tending an education along the lin
te Of and thrift, and Of aliay
,e ing the government TO go at the mat
is ter gradually SO that they could fet
=. their way, and make whatever COZ
rectionS IL the details of the plan wer
t. deemed advisable or necessary.
i'm In conclusion, I would thank 80
rs and your committee for the privilee
OF presenting this paper, and aSsul
Is you that 1t would a1ord me pieasui
to discuss with you any further d.
30 tails that may be necessary should IT
n. plans be thought Of value in the a
tempt to extend to the farIne'
SO through rural credit associations tt
r. aid given to the commercial Wori
or and SO much needed by them IN
an least lhc Sicotoi
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