Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1916-11-02

somewhat similar in character, one
located in Boston, which in six or
seven years has lost only $40, and
that loss was due to it's cashiers hav-
ing his pocket picked. The banker
tells me that he finds that the very
fact that the borrower had to risk
two of his friends to go on his note
is moral influence upon that Dor
rover almost irresistible. He will
pay that note even If he goes hungry,
If he has any manhood in him. Now,
If that is true in the city with wage
earners, just apply the same idea to
the farm community. Suppose a far
mer borrowed money from the local
credit union. The credit union would
require that that farmer have two of
his friends endorse his note. Then
suppose that farmer shirks the pay
ment of his note. How long would
he dare live in that neighborhood?
Wouldn't every farmer in the neigh
borhood despise him as dead beat?
Farmers are no more honest than
city people, but they are Just as hon
est, and just as reliable. You and /
having been raised on farms prObab-
ly feel that l am putting it too mildly
in saying that, but l am trying to be
charitable to the city folks.
The main point is that the Demo-
cratic talk about the impossibility of
solving the problem of how to help
the tenant farmer is insincere and is
a mere political project to glorify it's
bank of bankers the Reserve
Bank-and to pretend that it solves
all problems of the farmers when it
doesn't touch any phase of that ques-
ton at long distance.
Now, that is only the first step in
the proposed personal credits organi-
cation. l have shown that the notes
thus created are reliable and bank
able, but that doesn't go far enough.
, 1t still leaves the mass of members of
the credit union subject to the local
banker. and you must make the far
mers more Independent than that. l
have talked of only one credit union
because you only want one in a
Ineighborhood, but there would be a
thousand such credit unions in one
state. Every borrower would borrow
enough in excess of his own actual
needs to enable him to invest 10 per
cent, of his loan in stock in his credit
union That gives a cash capital to
the union. Now, let these several
thousand credit unions use half of
their capital by decorating and estab-
fishing a bank owned by the unions
themselves and to handle the redis-
counting of the notes for all the un-
ions of that State. Don't you see that
that puts the whole management of
the problem into the hands of the far
mers themselves?
The monthly installment payments
go to the credit union. not to the bank
and can be relOaned by the union, and
so earn double interest, giving a profit
to the union treasury. Eventually
that will build up fund, so the union
can depend on it's own capital for
loans and not have to borrow from
the bank.
l want to go still farther. I want
the cooperative banks of all the
States, then, to federate on national
basis and establish one central bank
to be entirely Independent of the Re-
serve Bank System, which will receive
from the As banks in the several
States not merely the individual far
mer's notes, but the direct obligations
of these As banks, on the basis of
which the central bank can issue
bonds. These bonds will have back
of them and under them the collective
credit of the unimpeachable character
of the ambitious, intelligent and hon
est tenant farmers and small farmers
of America. While investors might
not know enough about any one in
dividual to want to lend him money
directly, the debenture bonds of the
central bank of the personal credits
system will be as safe and sound and
desirable as Government bonds.
Do not get the impression that, un-
der this plan. only 500 loans can be
made, nor that monthly installments
are vital to the system. Those are
merely illustrations. The one vital
feature is that personal character,
expressed in endorsements of person.
al notes, and collective or co-operat-
i've credit. are sound security-fully
as reliable as farm mortgages, when
properly administered.
There is no mystery about the prob
lem of financing character in America
since that mystery has all been solved
in other civilized countries and in the
cities of America dealing with wage
earners. Through the federation of
credit unions, centering in the nation
al debenture bank as above outlined,
access will be had to almost unlimited
funds.
Cheer up, Ned. for long before you
can possibly get real money out of
this cumbersome Democratic law
there'll be long heads, instead of long
ears. in the Government stalls. The
Elephant and the Moose will not eat
such fodder as the Hollis Law, with
all its roughage, and l doubt their
even using it for bedding. They will
demand balanced ration-not shay
ings and green goggles.
Yours truly,
Cousin Ben.