The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1916-03-30
BANKERS AND RURAL CREDIT.

Many of the banks making mistake regard
rural credit they made regard postal savings banks
Fearing the entrance of competitors the field with
government backing they opposing rural credit bills and
are raising the old cry of the reactonay Le well enough
aone They assuming basis of criticism, facts
which do not existthat funds be perm
nenty invested in farm loans; that special
shown famers that there is demand among farmers for
the sysem that present Borrowing facilities ample
lat fair interest and that it proposed
funds in establishing banks compete with and nure
listing banks
are such that if the farmers do desire the credit
SYSTEM will be established for it be established only
on their initiative The first step to be taken organiza
ton by farmers of farm loan associations within each of the
twelve districts to subscribe 100000 the capital farm
land bank This will represent applications for of
100000 The government is then offer remaner of
the minimum capital 0O0to the general public for nine
y days Of the stock remains unsubscribed that
it is to be taken by the and paid for
lof the national treasury.
But this government capital to remain permanently
lin the business is only to help in getting the system
started and then to be withdrawn by degrees the farmers
increase their holdings The bill requires that farmer
who desires to borrow shall subscribe per the pro-
posed loan to the stock of his farm loan association that
latter subscribe equal of stock in the farm land
bank AS loans increase the banks capital will increase al
ways being cent of its aggregate loans After the mini
capital of 100000 has exceeded as new stock is
subscribed by farmers the capital is to be re-
funded and its stock cancelled This arrangement assures
that the farmers generally enter into the scheme govern
ment funds will be withdrawn and the farmers will con-
troll the entire system under federal supervision and control
to in the business aside from what stock may sub
scribe to the cooperative banks Joint stock banks may be
organized to operate within single lend not more
than fifteen times their capital and surplus If they make
better terms with the farmers and the farmers should pre-
fer the freedom from publicity of scrutiny of their affairs
which these banks will afford private investors success
fully compete with the cooperative banks.
The rural credit system will not be special favor to one
class will simply discrimination against that class
which has resulted from the operation of the national bank
ing system In practice that system has provided banking IA
cties for every business except agriculture By bddng
loans real estate it has Disseminated against farmers It
has gathered the savings of the farmers into the cities to be
lent chiefly to merchants manufacturers railroads The
conditions governing agriculture require special credit sys
tenn different in character from that provided for other bust
ness The shorttem credit given to merchants is no more
adapted to the farmers needs except for
than is the amortization system the needs of the
merchants Rural credits will be an excrescence on the
banking system; they will simply fill gap
This system is justified broad grounds of public policy
1T necessary to correct social maadusment whereby the
urban has grown out of all proportion to the rural
One Of the main of that evil is the high of capital
Ito the farmer and the short terms for which private capital