Maryland independent. [volume] (Port Tobacco, Md.) 1874-current, 1916-03-31
HOW The FRENCH
FARMER is FINANCED
Ample Provision For Rural Credits
Make Efficient And Organized
Cooperation Possible.
F. b. BoMBERGER,
Maryland Agricultural College.

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 a stock
company, organized under the strict.
est government supervision, the Gov.
ernor and two vice-Governors being
appointed by the President Of the lie
public. Its capital stock was origin
ally 100000, the state having grant,
ed it a subsidy of an equal amount:
now, however, its capital stock is
s45,000,000 and it is Independent Of
government aid 1t pays annual diyi.
dends of $40 and its stock in 1914
was worth about $50 in the open
market.
The Credit Foncier makes loans On
agricultural land and to municipall-
ties. 1t 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
Strict Government Supervision.
The Credit Foncier issues bonds Sc.
cured by mortgages held by it as Is
the case with the Landschaften. AL.
though these bonds are not guarantee d
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, sayinCs
funds ana even public funds. In 1913
the bonds sold in the open market as
SAqe bonds at ga; so bonds
at 90.6.
The Credit Foncier is administered
by a board of directors consisting OF
the Governor, the two Vice-Governors,
three auditors and about twenty diree-
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-
bier are carried on throughout the
Republic by branches of the central
institution. 1t will be observed that
khis great institution is organized
rom the top down in contrast with the
pierman Landschaft System, in which
he cenrtal control is created by a
union of local units. 1t also does away
with unlimited liability and is in the
lFtrictest 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
'iew Regional Bank system Of Banks
vas probably derived. By laws Of
1874 and 1899. the local agricultural
banks Of certain area or district are
irouped 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
10 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-sell
ing societies. The local bank acts as
the guarantor of the financial obliga-
tons 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
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
iividual 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 un-
limited liability system.
Loans must be secured by collateral
DR. by a guarantor; and range from
three months to one year. Rates of
interest are very low, ranging from
lss6 to 10 above the amount paid by
or savings banks upon de-
'osits. In 1906 the Credit Agricole
vas authorized to make loans secured
BY mortgage on land; but this branch
Of the business has not grown greatly
IS yet.
The Credit Agrieole is of especial
Value to the French farmer in develop
ng the cooperative projects for which
France, as well as the other nations Of
europe. are noted. Without these or
sanizatfons for providing agricultural
,redit, efficient cooperation in rural
ife and industry would be, as it is in
his country, practically impossible. A
itudy of the Credit Foncier and the
Credit Agricole indicates that ii ought
% be comparatively easy matter to
,reate sole modification of the Land
and Raffeisen Credit institu-
ions suitable to American conditions.
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