Catoctin clarion. [volume] (Mechanicstown, Md.) 1871-1940, 1916-02-03
HOW 1.-THE FRENCH
FARMER IS FINANCED
Ample Provision For Rural Creo'ts
Make Efficient And Organized
Cooperation Possible.
F. B. BOMBERGER,
Maryland Agricultural College.

Agricole, or short-time personal credlt
system. The Credit Foncier is a STOCK
company, organized under the strict
est government supervision, the Gov
ernor and two Vice-Governors ing
appointed by the President of the Re-
public. It's capital stock was origin
ally 100000, the state having grant
ed it a subsidy of an equal amount;
now, however, its capital stock Is
$45, 100000 and it Is independent OF
government aid. 1t pays annual diVi-
dends of 6.4I and it's stock in 1914
was worth about $50 in the open
market.
The Credit Foncier makes loans on
agricultural land and to municipali-
ties. 1t operates on substantially the
same basis as the German Lands chat
ten, except that it is not cooperative.
1t makes short time loans not to ex-
coed nine years and not subject to
payment by amortization; 1t makes
also long time loans which run from
ten to seventy years, repayable by
amortization.
Strict Government Supervision.
The Credit Foncier issues bonds SO.
cured by mortgag held by 1t as IL
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 a esult,
the bonds are deemed the safest kind
of investment for trust funds, savings
funds and even public funds In 1913
the bonds sold in the open market as
follows: 3kft bonds at ga; $50 bends
at 906.
The Credit Foncier is administered
by board of directors consisting Of
the Governor, the two Vice-Governors,
three auditors and about twenty di &C.
tors. This body is subject to the
French Law and to the will 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. 1t will be observed that
this great institution is organized
from the top down in contrast with the
German Landschaft System, in which
the GENITAL control is created by a
union of local units. 1t also does away
with unlimited liability and is in the
strictest sense Joint stock enterpri 9,
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 a plan from which orr
new Regional Bank system of Banks
was I-'obably 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 a 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-sell-
ing societies. The local bank acts as
~. a,,I ~
lions Of the individual farmers or
groups Of farmers, to the reg 'onal
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
4I 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,
varying from liability merely for the
capital stock to unlimited liability, as
in the case of the Raiffeisen Banks,
Only about one-fourth Of the local
banks in France have adopted the I'M
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
VIZ to 19e above the amount paid by
commercial or savings banks upon de.
posits. In 1906 the Credit Agricole
was authorized to make loans secured
by mortgage on land; but this branch
Of the business has not grown greatly
as yet
The Credit Agricole is Of especial
value to the French farmer in develop
ing the cooperative projects for which
France, as well as the other nations Of
Europe, are noted. Without these or
ganizations for providing agricultural
credit efficient cooperation in rural
life and industry would be, as 1t is in
this country, practically impossible. A
study of the Credit Foncier and the
Credit Agricole indicates that 1t ougnt
to b a comparatively easy matter TO
create some modification Of the Land.
schaften and Raffeisen Credit institu.
lions suitable to American conditions.