Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1914-07-08

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the credit association $1.26O,000, for
which the associations account to the
government at the rate Of three per
cent. per annum. This sum IL placed
ct the disposal Of the farmers credit
association In order that these asso-
Citations may be ready to give small
loans to their members. When any
farmer finds It urgently necessary to
secure loan in order to meet ex-
penses such as the payment Of wages,
the price of better seeds, or of artih-
cial manures. or Of feed for cattle, he
makes application to one Of these as
sociations. In determining the amount
Of the loan to be granted to each man
It Is the theory that the earning ca
pacity Of the borrower should be taken
Into account. This is thought to be
best indicated by the number Of dairy
COWS which he owns. A member may
thus obtain loan to about $13 per
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 - 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 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.
ton 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
ito the city of Copenhagen: These one
hundred farmers we're 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 loan of $125, 900
;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 tho
agreement into which all had entered
lin 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.
A 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 ita
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 it's amorti.
cation 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 ia
invest In an egg-paclzing and shipping
organization. Their leaders went to
the bankers as did the leaders Of the
Trifolium dairy association and made
a 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 a period
OF ten years rather than twenty. This
seems to be quite an ordinary prao
tice.
Can Banks Supply Rural Credit
F.; I have said it is up to the banker
to supply the American farmer with
loans similar to those supplied to the
European farmer. But there are those
who say that the joint stock bank can
never meet the farmers needs as do
cooperative credit societies and that
cooperative credit will come in spite
of all the bankers can do.
DR.. Charles Mccarthy is of this
number. He bases his conclusion on
these grounds: First, no Joint stock
bank can afford to. tie its money up
for long-period loans as do the credit
banks. These deposits are all short.
time deposits. They have no way of
hypothecating one series of loans in
order to raise money for another So
ries. Their system of finance is not
sufficiently elastic to lend itself to the
transactions demanded in an ADEQUATE
line Of rural credit.
Second: No money-making concern
can possibly serve the farmers as do
cooperative credit societies whose sole
aim is to aid the borrower and to pro-
tect his interests.
But in agriculture system OF rural
credit cannot be substitute for
brains and business sense and a mar.
keting system. Unless the farmer pro-
duces good product and sells it to
advantage his farming will be fail.
ure. Easy loans will only make It
q bigger failure. Cooperative credit
is important, but with it must come
a better system Of marketing either
cooperative or otherwise, which will