The midland journal., 1916-02-04
Row THE FRENCH
FARMER Is FINANCED
Ample Provision For Rural Credits
Make Efficient And Organized
Cooperation Possible.
r. B. BoMBERGER,
Maryland Agricultural College.

Maryland AGRICULTURAL COueSes
In France there are two agricultural
credit institutions: first, the Credit
Foncier, or longtime land mortgage
credit institution; second, the Credit
Agricole, or short-time personal credit
system The Credit Foncier is stock
company, organized under the strict
est government supervision, the Cow
ernor and two eGovernors being
appointed by the President of the Re
public. It's capital stock was origin
ally $2,OOO,000, the state having grant,
ed it subsidy of an equal amount;
now, however, it's capital stock is
$45, 100000 and it is independent Of
government aid. It pays annual divi-
dends of 6.496 and it's stock in 1914
was worth about 1S0 in the open
market.
The Credit Foncier makes loans on
agricultural land and to municipali-
ties. It operates on substantially the
same basis as the German Landschaf-
| ten, except that it is not cooperative.
It makes short-time loans not to ex-
ceed nine, years and not subject to
payment by amortization; It makes
also long time loans which run from
ten to seventy years, repayable by
amortization.
Strict Government Supervision.
The Credit Foncier issues bonds se-
cured by mortgages held by it as is
the case with the Landschaften. AL
though these bonds are not guaranteed
by the French Government, so strict
is its supervision, that there is prac-
tically no chance for loss. As result,
the bonds are deemed the safest kind
of investment for trust funds, savings
funds and even public funds. In 1918
the bonds, sold in the open market as
follows: 31k06 bonds at 97.4; $50 bonds
at 90.6.
The Credit Foncier is administered
by a board of directors consisting of
the Governor, the two Governors,
three auditors and about twenty direc-
tors. This body is subject to the
French Law and to the win of the
general assembly of stockholders.
The operations of the Credit Fon-
cier are carried on throughout the
Republic by branches Of the central
institution. It win be observed that
this great institution is organized
from the top down in contrast with the
German Landschaft System, in which
the cenrta1 control is created by q
union Of local units. It also does away
with unlimited liability and is in the
strictest sense joint stock enterprise,
operated In the interest of the stock
holders.
Short Time Loans.
The Credit Agricole, the short-time
personal-loan institution of France, is
organized upon plan from which our
lnew Regional Bank system of Banks
was probably derived. BY laws of
1894 and 1899, the local agricultural
banks Of certain area or district are
grouped together under a regional
bank, Through these regional banks
the local banks do their business, and
the French Government has placed at
the, disposal of the regional banks, in
order that they may lend them to the
local institutions, large sums Of money,
which the Bank of France is bound
to lend them without interest These
| funds are distributed among the re-
gional banks by special committee
named by the minister Of agriculture.
The local banks are composed in
whole or in part of one or more agri-
cultural syndicate or buying-and-seli-
ing societies. The local bank acts as
the guarantor of the financial obliga-
tions of the individual farmers or
| groups Of farmers, to the regional
banks, which in turn do the real bank
| ing business, securing the money, etc.
The most common method is for the
regional bank to discount the bills Of
the local bank.
Low Interest Rate.
Capital of the local bank which is
usually very small is invested In stock
of the regional bank. and interest Of
40 per annum is paid upon the same
| The matter of receiving deposits is
optional with the local banks. as is
also the extent OF liability OF the in,
dividual members Of the local banks,
1 varying from liability merely for the
! capital stock to unlimited liability, as
f; in the case Of the Raiffeisen Banks.
Only about one-fourth Of the local
banks in France have adopted the un-
limited liability system.
Loans must be secured by collateral,
or by guarantor; and range from
three months to one year. Rates Of
| interest are very low. ranging from
| 1k9s to 10 above the amount paid by
commercial or savings banks upon de-
posits. In 1905 the Credit Agricole
was authorized to make loans secured
by mortgage on land; but this branch