Fulton County tribune. (Wauseon, Ohio) 1883-1925, 1914-05-01


head of cattle fed and MIXED ON the
place. The loans must be repaid in
from one to nine months. Interest
must not, according to the original law
exceed AZ per cent. per annum to
the borrower
Danish Bankers Have Reformed.
The fact that there are in Denmark
many banks which are organized for
the sole purpose of meeting the needs
of the farmers has awakened the Dan
ish banker to the fact that the rural
credit is a big business which he can
not afford to ignore. Compared with
the American banker the Danish
banker most decidedly has reformed.
He does meet the needs of the farmer
in a manner which would surprise
Americans. This is particularly true
of the method in which he assists in
financing cooperative associations.
When the big Trifolium dairy associa-
tion was formed, for example, it was
done in this way: One hundred farm
ers, most of them owners of large
farms, formed an organization for the
manufacture of dairy products and for
the further purpose of supplying milk
to the city of Copenhagen. These one
hundred farmers were the owners of
something like $4,000 cows. While
they individually had property, real
and personal, they had no money
which they wished to invest in CO.
operative organization. They there
fore sent their leaders to the bank
! to borrow the money. They simply
] asked the bank for a loan of $125,000
on the note signed by these leaders.
| The bank did not require the other
members of the association to sign
the note, although by the terms of the
agreement into which all had entered
in the formation of the cooperative
association all were liable, jointly and
| severally, for the debt contracted at
the bank. AS matter of course the
bank made the loan to these farmers
at a low rate of interest.
most interesting feature of this
transaction is the method of repay
ment. 1t was agreed that the loan
should extend over period of twenty
years with the privilege on the part
of the association to repay out of its
! profit each year sufficient sum so
! that at the end of the twenty years
the debt should be discharged. AT
this time the association has been run
ming for twelve years and has been
more than able to keep UP its amorti-
zatiop payments. At the end of eight
years more the debt with the bank
will be discharged. At Fredericks-
sund, out some little distance from
Copenhagen, there is a cooperative
egg association which is composed of
10000 farmers. These 10000 farmers
had no capital which they wished to
invest in an egg g-packing and shipping
organization. Their leaders went to
4 the bankers as did the leaders of the
Trifolium dairy association and made
similar loan except that in the case
of the 10000 farmers who wished to
start an egg packing establishment the
period of repayment was over period
of ten years rather than twenty. This
seems to be quite an ordinary prac-
tice.
1t is of course evident that the bank
ers consider these associations as
founded on sound financial principles,
1t also is evidence, however, that the
bankers of Denmark have seen the
necessity of getting out of the ordi
nary rut of commercial loans and are
formulating a special contract and a
special loan on special terms for the
farmers and for the farmers co-opera
tive associations.
Can Be Adapted to American Nesds
Now the details of operation O.
these Danish cooperative societies
are unimportant. The general purpose
and results are most important. i
: you cannot remember all the facts
, as to methods this much may be eas
!, lily remembered: Any Danish farmer
or farm laborer who is honest and in
, dustrious can buy his farm and pay
! for it out of his earnings, taking al
the time he needs. He need not saw
) up to exceed one-tenth of the price o
the farm and quipments if he wishe:
to buy small farm or two-fifths il
, case of the purchase of a larger farm
! He can borrow money at low rate o
! interest for the purchase of seeds, i'm
: plenents, fertilizers and live stock
) American bankers cannot be asket
: to duplicate all features of credi
r loan system from abroad Interes
: rates are different The American
: farmer may not want a. forty-five o
4 | c 1ty air t>r-
/ may vary, but there are two thing
e the farmer in the United States want
and will have: First, an opportunit
: to borrow small amounts on longe
e time than ninety days; and, second
e an opportunity to raise money to pul
0 chase farm on mortgage runnin
t longer than three or five years and on
i containing amortization features. HOY
l. is the farmer going to secure these OF
; portunities? 1t is up to the banker
/ Can Banks Supply Rural Credit?
9 have said it is up to the banke
to supply the American farmer wit
:, loans similar to those supplied to tn
European farmer. But there are thos
: who say that the joint stock bank ca
= never meet the farmers needs as
cooperative credit societies and tha
cooperative credit will come in spit
! of all the bankers can do.
DR.. Charles Mccarthy is of thi
: number. He bases his conclusion O
!. these grounds: First, no joint stoc
o bank can afford to tie its money u
!. for long-period loans as do the cred
q banks. These deposits are all shor
; time deposits. They have no way c
r hypothecating one series of loans i
9 order to raise money for another S.
. ries. Their system of finance is nc
= sufficiently elastic to lend itself to tn
n transactions demanded in an adequat
p line of rural credit.
e Second: No money-making concer
r can possibly serve the farmers as
d cooperative credit societies whose sol
It aim is to aid the borrower and to pre-
J. tect his interests.
II But in agriculture a system of rurs