The gazette-times. [volume] (Heppner, Or.) 1912-1925, 1915-04-29
THREE plans by which farmers in
actual practice have succeeded in

ihPioNhh6 thC pei oOudl ClCuit IL
securing loans at less than the prevailing
rate of interest are outlined in a new pub
lication Of the United States Department
of Agriculture, Farmers Bulletin No. 654.
How Farmers May Improve Their Per-
sonal Credit"
The first Of these plans has worked out
in certain localities in North Dakota so
: we'll that the farmer has been able to bor-
row money on his personal note at s per
cent. at a time when the usual rate in his
vicinity varied from 10 to II per cent.
To secure this reduction in interest, the
farmer agreed that the bankers should
buy the dairy stock for which he wished
the loan and sell it to him at actual cost.
The purchase in a number Of cases was
conducted with the advice of state or Fed
eral dairy specialists. The men who fur
nished the money were thus IL 4 position
to make certain that 1t was used for pro-
ductive improvements which would enable
the borrower to repay the loan. Under
this plan, in fact, the farmer may be
said to have borrowed the improvement
itself instead of the money to buy it with,
for the disposition of the money was
taken out of his hands.
An Idaho Plan.
n pan IL thC odnlC 6ClCldl
was carried out a year or two ago in
Southern Idaho, but in this case three or
four banks united in the purchase of a
carload of dairy stock. In another case
in Nevada a local creamery supplied the
money and held back a part Of the re-
turns from milk and cream delivered by
the borrowers.
Altogether 491 cows and heifers were
distributed among GA farmers, the aggre-
gate amount of money represented by the
loans being $39,4S3. This is the simplest
OF the three methods. 1t consists essen
TALLY in permitting the lender to say how
the money that he loans shall be spent.
Under such circumstances he naturally
feels more secure. and the rate of interest
lessons with the risk.
In regions where for various reasons
this plan has not proved possible, another
method Is to have the farmers collectively
assume a certain guarantee for the notes
given by individuals. In Southern Mon
tana, for example, 10 farmers organized
an association and appointed trustees to
represent 1t in negotiations with a local
bank. The trustees were authorized to
guarantee a limited amour to the bank
on the joint and several liability OF the
association members.
With this additional security the bank
agreed to advance $1,000 to the ~associa-
ton at 8 per cent when the general bank
rate was 10 and IL per cent.
Two delegates from the association pur-
chased with the money two carloads OF
heifers, which were distributed among the
members. each animal being charged with
a proportionate share for all the incl
dental expenses connected with the trans
action. Each purchaser pledged himself
to care for and breed the cattle by meth
DDS approved by the trustees.
In the third plan the guarantee is fur
nished not by the farmers themselves, but
by an outside interest. As the plan was
developed In Wisconsin and Minnesota,
this outside interest consisted Of local
business men, who were in their way as
much concerned as the farmers with the
general improvement OF agricultural con-
ditions in their region. .
Under this plan the business men sub
scribed a certain percentage of the funds