Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1914-04-29

thus obtain ! loan to about @13 Per
head Of cattle fed and milksd on the
place. The loans must bs repaid IN
from one to nine months. Interest
must not, according to the original law
exceed ~ per cent per Annum to
the borrower. 4 +
Danish Bankers Have Reformed.
q The fact that there are In Denmark
many banks which are organised Tor
the sole purpose of meeting the needs
OF the farmers has awakened the Dan
ish banker to the. fact that the rural
credit ID, a big business which he can
not AFFORD to ignore. Compared with
the American banker the Danish
banker most decidedly haa reformed.
He does meet the needs Of the farmer
In ! manner which would surprise
Americans. This il particularly true
OF the method in which be 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 he
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 10000 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. Az 9 matter OF course the
bank made the loan to these farmers
at q low rate OF interest.
4 A most interesting feature Of this
transaction fs the method Of repay
ment. It. was agreed that the loan
should extend over q period of twenty
years with the privilege on the part
or the association To repay out Of it,
profit each year . sufficient sum 50
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.
zation 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 IL cooperative
egg association which is com posed of
10000 farmers. These 10000 farmers
had no capital which they wished to
invest In an egg-packing and shipping
Their; leaders went to
the bankers as did the leaders Of the
Trifoliumi 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 Prepayment was over period
OF ten years rather than twenty This
seems to be quite an ordinary prAc'
atice. 5s5.5
It IL Of course evident that the bank
ers consider these associations as
founded on sound financial principles.
It 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 q special contract and :
special loan on special terms for the
farmers and for the farmers coopera,
tive, associations. 5353
Can Be Adapted 10 American Needs.
Now the details Of operation OF
these Danish cooperative societies
are unimportant. The general purpose
and results are most important. II
you cannot remember all the facts
Il to methods this much may be eas-
lily remembered: Any Danish farmer
or farm laborer who ID honest and In
sdustrious can buy his farm and pay
for. It out Of his earnings. taking AL
the time he needs. He need not save
up to exceed .one.tenth Of the price Of
the farm and quipments II he wishes
to buy q small farm or two-dftha In
case OF the purchase Of . larger farm.
He can borrow money at . low rate Of
interest for the purchase of seeds, i'm.
plements. fertilizers and live stock.
American bankers cannot be asked
to duplicate all features OF q credit
loan ssystem from abroad. Interest
rates are different. The American
farmer may not want g forty-nve or
seeventy-nine year loan. Other terms
may vary, but there are two things
the farmer in the United States wants
and will have: First, an opportunity
TO borrow small amounts on longer
time than ninety days; and. second.
an opportunity to raise money to pur-
chase farm on q mortgage running
longer than three or ave years and one
containing amortization features. How
Is the farmer going to secure these op-
portunities? It il UP to the banker.
Can Banks supply Rural credlt1
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 AZ do
cooperative credit societies and that
cooperative credit with come In spite
Of all the bankers can do. .9
q DR.. Charles Mccarthy is Of this
number. He bases his conclusion on
$50 -. - =