The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1923-11-23

already broad enough but in a few
states special action will be neces-
sary." - y.
Minnesota for example, has a law
specifically authorizing the forma-
ton of agricultural credit corpora
| lions, 1t was pointed out by the sec
Rotary. This measure was enacted
at the 1928 session of the Mime
sofa legislature, and authorizes the
Incorporation of credit associations
with power to make loans to their
members on the security of staple
agricultural products and to dis
count the paper of their members
Lows passed in North Dakota and
South Dakota likewise authorize CO.
operative associations to finance
their members on terms enabling
the. associations to rediscoult farm
credit banks. Specific Legislation Of
Department of Agriculture, places
farmers in a position to take ad-
vantage Of all the credit facilities
provided by the federal informed
late credits act. w..
Favorable legislation exists in a
number of other states. Thus Wis
| consin has a law permitting the
formation of cooperative credit asso-
Citations with unlimited capital stock
and no limitation on the amount Of
indebtedness they may assume
Similar laws giving cooperative
marketing associations -, borrowing
and loaning powers exist in Idaho,
wyoming and Montana. In Colorado
and California laws have been en-
acted permitting the formation of
cooperative associations with gem
eral business powers. 1t Is thought
the laws Of these two, states might
confer loaning and borrowing pow4
ers by necessary implication.
Arizona has a cooperative mar
keting act which imposes no limita-
ton on the indebtedness. which CO.
operative associations may carry,
and. so has Missouri. The laws of
Michigan contain no specific provi-
sion for the formation of agricultur-
al credit corporations, but the gen
eral corporation laws of that state
are considered broad enough to
permit the formation of farmers
credit corporations with ample
i powers to utilize the facilities of
the intermediate credit banks. It is
thought the general corporation
laws Of Nebraska and Nevada
might be similarly construed. An
express statutory provision confer
ring the necessary corporate pow
ers, however would be a more de-
sirable form OF legislation.
On the other hand the laws of
Iowa and OF Oregon seem to pre-
clude agricultural cooperative as
sociations from borrowing for their
members from the intermediate
Rrndif honIu ThA~N - "a
thirty ninth Iowa general assembly
(192D authorizing the formation of
cooperative marketing associations on
nom stock basis, but the measure
does-not empower such associations
to extend credit to its members.
Moreover, it limits the amount of
indebtedness such associations may
assume to two4thirds of the amount
OF their capital stock, Iowa farmers
are thus ut a disadvantage in the
matter of obtaining intermediate
credit through their own local CO.
operative agencies. Oregon has a
general cooperative law but 1t gives
cooperative associations no specific
power to borrow money or make
loans to members, and there is no
language in the statute from which
such power might be implied. Prob
ably other states are In the same
position.
Borrowing by individual farmers
directly from the intermediate
credit banks IS not permitted under
the federal agricultural credits act
because the cost OF setting up ma
chinery for such dealing would be
heavy and would necessarily be felt
in higher interest rates. It is point
ed out, however, that the measure
fails OF its full effect where inter-
mediate credit does not get down
to the individual farmer. It can get
there in many cases through the
commercial banks. Where existing
facilities are adequate for supply
ing farmers with intermediate cred
1t It is not desirable, say depart
ment officials. to set UP new credit
concerns that will duplicate old
ones. They asert. however, that
where existing facilities are made
quate or where local bankers do
not avail. themselves OF the discount
facilities of the intermediates credit
banks, farmers should be free to
develop their own special credit
agencies. State legislation Is re.
quired to give them this opportuni.
ty because cooperative agencies