The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1915-05-12
THE RURAL CREDIT
SYSTEM IN EUROPE
IA Seminary of the Principles Gov
.>sxrning the Organization n Up
..ratien of the Leading Land Gre
Institutions of the Old World.
By B. L. Moss.
~YProqressive Farmer.)

rtlo
1urrners America must do for hers.
This has been an expression COM
used in discussing the need Oh
= ,nerter rural credit system IN tne
limited States, and to the millions OIL
American farmers vitality concerned
= statement summarizing the OUT
.s1nding features, of the most sue
.sxssful European systems snoulo
r,xve Of interest. Both in the eXten'
!s,n of long-term credit secured EF
real estate mortgages and IN proVi''
sn, facilities for short-term loans on
u.rsonal security, European nations
AMP undoubtedly far in advance Oh
MT w country. Here we n "a deal
entirely with long-term loans' lea'-
zng the other subject to be discussed
IN a later article.
In preparing this article the wrl-
KEY has drawn on the authoritative
work on Rural Credits" by Myron
Herrick, formerly United States
Ambassador to France, who perhaps
y,zss more thoroughly than any other
american investigated European ru-
mi credit institutions; bulletins by
David Lubin, American delegate to
THE international Institute of Agrl-
,aslture, Rome, Italy; and the report
suf the American Commission that IN
vxstigated European rural credits
:syStems.
Some Rural Credits Definitions
As ordinarily used the term "ru-
ral credits" may be said to include
an means by which capital is ex-
asnded and made available to farm
,sers for the development and opera
Epp of their farms. longtime oar
IN European countries usually run
Fpr periods of from 10 to rs years,
with an average of perhaps not less
:xhan 35 years. These long-term loans
are practically always payable on
she Amortization" plan, which
zaeans simply that the interest (sel-
DUN more than 4 or 5 per cent per
ranuum) and a small percentage of
the principal of the debt are paid in
small equal annual or semi-annual
anstallments. AS an illustration, a
loan of $1,000 for 16 years at 6 per
gent by the amortization plan would
be repayable at the rate of 500 an
nuaIly, which would be sufficient in
..16 years to pay the interest and en-
sirely repay the loan. Or a loan of
:s1Do, with interest at 6 per cent,
may be entirely repaid, including in
terest, in 10 years, by 10 annual
payments of SO each.
Next to amortization, "debenture"
IS one of the most common terms
used in connection with rural credits
When so used, the word means SIM
ply a bond secured by the assets of
the issuing company, the assets in
this case being chiefly in the form
gef farm mortgages held by the lend
ing association, company, or govern
1nent, as the case may be.
Farmers by Combining, May Get
"Wholesale Rates" on Credit.
The primary business of an ade-
quately designed system of rural
.a:redits is to bring together the man
with money to invest and the man
'who needs money to conduct his
farm business. 1t is evident that if
xhe mar with money to lend had per-
,snnally to look to the placing of
each small loan, to ascertain the
standing and reputation of the bor-
ra'Wer, locate the boundaries of the
aand offered as security, investigate
the title, and attend to a host of
other expensive details, there would
be little money offered at low rates
ON farm lands as security. In truth,
Just here is the real difficulty in
America today: We have far too
few organizations of u~nimpeachable
standing and government-supervised
That make their sole business that of
bringing the investing public and
worthy, needy farmers together.
Where such agencies exist, as
shey certainly will exist when we
get the kind of rural credits sys-
tenn we should not be satisfied with
ont, it is their business to investigate