Saint Mary's beacon. [volume] (Leonard Town, Md.) 1867-1983, 1916-02-03
SHORT TERM LOANS
FOR THE FARMER
Rural Credit Associations Provide
Working Capital For German Farm
ers Al Low Rates OF Interest.
F.B. BoMBERcER
Maryland Agricultural College.

]
MORTGAGE Associations are designed to
provide for the German land owners
longtime loans OF capital upon the Sc.
curity OF their land. 50 the Kaiffeisen
Or Rural Credit Associations or Banks
are designed to provide short term
loans q working capital to enable the
German farmers to plant. cultivate,
harvest and market their erpps. These
Institutions derive their name from
William Raiifeisen who established in
1862 a. Anhansen cooperative union.
o. association Of farmers for The pur-
pose Of commanding credit for the in.
diyidual members upon their combined
credit Ia 1880 The number Of Rural
Banks IN Germany was I.72s in 1900.
they had Increased to 9799 While in
1910 they numbered 1851. Moreover.
they have spread over The whole con
tlnentai Europe and are in operation
ia Asia, Australia South America and
eyen in Canada.
Is a heighborhood Bank.
Tile Raiffeisen type Of Rural Credit
Bank 81 a very unimposlng affair It's
operations IRE confined 10 d very i'm.
tied area usually district IN which
the members are personally known 10
the others, The average membership ii
The province IL saxony being ninety
TWO per bank Usually the only paid
officer y treasurer. while the ONCE
may be centrally located farmhouse.
1 9 posfofiice. a store or often the resi-.
dence Of the parish priest The aver
axe coal Of management IS only one.
lffih uf one per cent.
The management % The bank Il IN
the hands OF committee of five. viii,
another committee Of Ave 10 audit the
accounts both coiandttees being elect.
"a BY az members of the association
al rs annual meeflie in which every
member has Foie Loans which are
made ofly ~ memAers are usually
smsii aycrasing abo0t $500 and are
always secured Tor some speclfc pro,
lduetive purpose. specified ia The 40.
pilcntiou 70 secure q loan the Dor.
rover must givh his note 10 the asso.
rlauon. endorsed By q fellow member
cr supported 81 collateral ii APPROX
"a type me adsisahll u making
me loan ~ eaeh case y tassed upon
BY Che managing eommithe. ana the
use % which tlle proceeds ~ the loan
arr puf Is under the seruAny Of The
members az the ssoeiatioA Who are
TIC neighhors y ne borrowA
Lo@ Interest Rates.
4 The terno III which loans arkmade
range IRON Il months To three sars.
fhe average being about one yeaf& IN
case 81 failure Of crop. IN bad fea
sons. The loans ara extended for adia.
ltlonal periods vers eoiDmoD forns
( ~ Joan 9 fhsg made on current ac.
count IN tAls case Tie loan "a APP
I proved up 70 a certain amount. but
The money IS drawn aut only ~ need.
I'd. interest being thafged only on the
amount used # the aiOHeg Is mlsased
the loan can b. called 81 any Tine.
Funda fat ghe nse 81 members are
derived froiu the SAL. IL eapital stock.
one alf PER eeals Fiuai reserve f,inds
nccHmulafsd from previous years. 26
per cent from SAVINGS deposits and
curreat accounts Sc per cent. from
central associations, referred to later.
i12 per cent Deposits are accepted
from anyone hnt ohls members are
allowed 70 keep current accounts
The rates az which loans are made
10 melnbera afe Yefg low. averaging
from 4 II TO I2 ser cent. This con
dition s. made possible from the fact
that these banks are cooperative in
fact as vol as IN name Usually no
dividend are paid on capital stock.
all earnings being carried to the re-
serve funds The more sueeeHsful the
bank the lower are the rates OF inter.
est charged 10 members The profit
4haflngpollcy together with the ex-
cBcdingiy low cost of administration,
X gives 10 the farmer exactly what he
needs, abundant working capital. at a
very low rate u interest. for periods
d tame bot viii enable him 70 plant
q crop sHd await rs maturity before
being called upon 20 repay the loan
A National system.
I Each of these local Rural banks is
combiaed into a provincial union. at
tho head Of which Is The provincial
bank which serves as clearing house
tot the local banks These provincial
banks Tend u equaliae The surplus
funds % The several banka and furnish
capital 10 lhe local banka for loana
to their members at q cost Of about
one.haif per cent more than IS paid on
deposits fhe provincial hanks are Ia
turn united with the National FEEDER
alton Of Darnsladt which Is an assoc
citation 81 practically an 81 The agii-
leultHrai cooperative societies 81 Ger
lmans
The Rural Tanks Of ench province
ATE united % forsn 4 Central Cooper
alive Association for the purchase and
sale for members Of agricultural prod.
pcts on = wholesale basis or for carry.
ling on cooperative enterprises Of any
kind
Thus the Raineisen Rural Credit
I HAMS provide, their members with
abundant capital at low rates OF inter-
eat for periods suited TO their needs
aud enable them to cooperate on a
scale scarcely dreamed ii In America.
Thex enable the German farmers 10
cultivate better, fertill9e better, take
better care Of their land and harvest
ana market their crops to better adj.
vantage above All they furnish the
machinery for elective and efficient
cooperation.
r4s+-- --r---.s
chruase pIaccuragers.
4 II - really very curious 70 observe
4 how. even Ii modern times, the acts
Of disconragen prevail, There are