The Raymer enterprise., 1914-04-23

inept phrase since any farmer who has
good character. who is sober, hon.
est. industrious, intelligent, productive
worker, has a capital that is consid.
cred proper basis for credit and he
can in fact capitalize his character.
His character is in very truth under
these conditions his capital Here Is
the way II Is done here In Denmark:
BY the law enacted In 1893 the gov.
ernment is authorized to turn over to
the credit association $1.250,000, for
which the associations account to the
government at the rate OF three per
cent per annum. This sum is placed
at 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 1t urgently necessary to
secure loan in order to meet ex.
penses such as the payment Of wages,
the price Of better seeds, or of artif.
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
1t 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 Is 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.
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
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 loan Of s125.00
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
seyerally. for the debt contracted al
the bank. As matter OF course the
bank made the loan to these farmers
at 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 a period OF twenty
years with the privilege on the part
OF the association to repay out of Its
profit each year a sufficient sum SO
that at the end OF the twenty years
the debt should be discharged. Al
this time the association has been run
ming for twelve years and has been
more than able to keep up its amorti
zatlon payments. AT the end of eigh,
years more the debt with the bank
will be discharged. At Frederieks
sund, out some little distance from
Copenhagen, there is a cooperative
egg association which Is composed ol
10000 farmers. These 10000 farmers
had no capital which they wished to
invest in an egg-packing and shipping
organization. Their leaders went to
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 tc
start an egg packing establishment the
period of repayment was over period
oil ten years rather than twenty. This
seems to be quite an ordinary prac
tice.
Can Banks Supply Rural Credit
| have said 1t 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