Show 4 r gk the source of the bank account coope co operative cooperative ope JL active farm products marketing MaX how it Is done in europe and may be done in america to the profit of both farmer and consumer by MATTHEW 8 DUDGEON if copyright 1914 western newspaper union WILL THE BANKERS REFORM copenhagen denmark the american banker must reform if he does not ho he will be up against if as are others who refuse to mend their ways the american Amerl cm farmer cannot get money of american bankers upon terme terms suited to hi needs he lie Is going to hare bale the money from some source if the banker will not give it to him he will organize a new kind of at a bank for you may rest assured that the american farmer la is going to have an opportunity to borrow money upon some suitable eul table basis the irish farmer can get money on favorable terms the belgian farmer cooperating with his neighbors doea does his own banking in germany the cooperative banks do a business buel nesa that la Is astonishing in its volume in benmark it is easy to get money for buying a farm or for temporary investment in seeds fertilizers or stock the same la to true oc of the farmer in italy and franco even in benighted russia farm credits are cared for by co operative organizations do the of america think that the american farmer Is going to con consent to continue to be the only civilized agriculturist who has no abc adequate qu ate borrowing facilities that Is not bot the american way ay what then can possibly prevent the formation of cooperative credit associations all over america nothing except the presence of some institution that will do for the american farmer what cooperative credit Is doing tor for the european farmer it if the american banker wishes to do the banking business of america so far as the farm ia I 1 concerned he and he be alone can give the farmer this eort sort of an institution and thus make operative cooperative co credit societies unnecessary it la is up to the banker capita capital for farming formerly when an american farm could be acquired by living upon it when ben horses and cows and implements were cheap and when fertilizers blooded stock and special high grade seeds were era unknown a young man with ith comparatively little capital could begin farming now considerable demable de rable capital Is as necessary to success in aarl agriculture as at it is to in the manufacturing industries every wise farmer knows that money judiciously expended in better stock better bettor buildings laborsaving machinery proper fertilizers and good seed will net largo large rel returns turna dut but it takes money to do these things consequently there is to a demand for loans in america the farmer can seldom get got a loan on terms that meet his needs in ireland belgium Ger germany matty 11 holland olland denmark franco france italy and elsewhere upon the cont continent luent the banks have forced the farmers to organize operative cooperative co credit societies in many instances in the government also I 1 has aided the operative cooperative banke banks in obtaining money for loans bans these so ci oties ire taking a sn profitable business anay from the bank now anen it is too late the banks realize heir their mistake to buy a fram there are a number of different methods open to the daa dau leh ish farmer it must be remembered that in denmark a farm la Is doneld red ered ae ne having live block stock and implements used in la working the land inseparably attached to it hence the price to be paid includes udea all equipment necessary to the operation af the farm and all mortgagee mortgages are secured by a pledge of at this thin personal lamperty erp perty as well as of at the real estate it if the would be buyer has forty per cent of the purchase price he may apply to a credit society for a longtime loan amounting to sixty per cent of the value of the farm and all equipment and stock upon it the loan way run from forty five ears to seventy nine years the borrower has his prospective purchase surveyed and assessed he lie makes out a mortgage and delivers it to the operative cooperative co society eo clety this mortgage and hundreds of oth pro like it are delivered to a trustee with ith a trust deed which pledges them us security for a series berles of bonds the co operative society guarantees the bonds also it la Is from the sale of these bonds that the operative cooperative co society obtains its funds these co credit associations have in the beginning no capital whatsoever hach each Is an agency whose functions are lo 10 peo 1 that the real estate security of Is to assessed ace eseed at its true value 2 that the title Is clear 3 th it the mortgages are properly executed 4 that they are grouped pledged and deposited with alth the tru trustee stew 5 that the trustee issues bonds 6 that the land buildings and equipment are properly cared for and their value ie Is not permitted tc te deteriorate 7 that the payments of principal and interest are promptly met el easy repayment of loan loans the farmer pays from four to six per cent of at the principal amount each year this Is not wholly holly interest baw eer oer for it includes a small install Ind tall ment of principal for the mortgages are all amortization mortgages mon gages pay ment of this fixed sum annually or u animally joiy for the fixed period automatically discharges the debt A email small amount out of each payment PaY mInt I 1 im also set aside tor for reserve for the operative cooperative co society and for an expense account it has been the universal experience however that the expense runs very low still easier for the farm laborer Lz borer there are otner forms of loans even more advantageous to the borrower particularly it if he be la Is one of the poorer farm laborers if such a laborer seeks to become a lard owner on a emali scale he lie may under certain conditions secure a loan for nine tenths of the value of the proposed purchase being required to advance only one tenth of at the purchase price in cash the government furnished the funds for these loans the are 1 the borrower must have been engaged la in ag ri cultural labor for five years women may take advantage advant rge of this law as well ae no men 2 the land must not exceed ten acres in extent nor 2144 in value 3 tho the borrower at and d pro bec tive purchaser must agree to crop the farm in a certain manner dividing it up into fai five e or re seven en fields and folt lowing a certain rotation of crops thus insuring continued productiveness and preventing pre enting deterioration of soil boll fertility under these mortgages the bor borrower roer pays three per cent interest ith no installments upon tho an for the drat five live ears then he POS in addition to the interest In interest ferest one per cent upon to fifths of the loan as an installment principal dolne tule this until the two to fifths of the loan Is B entirely discharged thereafter he paa pas an annual installment of one per cent upon the three fifths remaining of the principal this being in addition to his three per cent entert as before the bonds may be issued upon unstamped paper and aro are free from ta acs doce does the dwalsh f armer d of these oi itle SM aba alim tenants becoming K jr land owned wn e rl 5 facts arc are thebe these denmark has 2 en TI K population somewhat less 1 tharl 1 X boin of chicago it baa has about 51 0 k rt 1 me iks including those in ca bitle ties and tu Inget kne well aa As those in tb the 0 rural glons alons these co cooperative operative credit etlen havo have a membership 0 of 0 en olt that la Is to any tw to 0 out S overy civo nv for fai rilles in the entire try are represented in them uns conz to i ns its a result at t tola lile credit system wa of in 1 per cent of 0 tho the farmers ot of denin dento I 1 ert ot t ark own on their ovi owe land 6 I 1 how character Is capitalized obtaining a loan on personal sect jett ity hae has been euphoniously tera 10 D capitalizing character it la Is noraa a do inept phrase since any farmer a good character who if ie a sober hoi boa ost eat industrious intelligent product ip old worker hue has a capital that I 1 ie conall ered cred a pro proper per baele basis for credit und be to can in fact capitalize hia his character ilia 1118 character la Is in very ery truth under del these conditions his capital hera 1 the way it ie is dono done here in denmark deama tha the law enacted in by 1898 the go got la Is authorized to turn over to the credit association lor for tot which the associations account to th the b O 0 government at the rato rate of three pr per cent per annum this sum Is in place placed at the dispo disposal sil of the farmers credit association in order that these asco alto cind lous may be ready to give loans to their members mcm bore when any ny farmer finds ands it urgently necessary nece seary t to secure a loan in order to meet ex benses such buch ae as the payment of wages tho the price of better seeds needs or ct of UA caal manures or of feed tor for cattle h b makes aD application to ono one of these a u in determining the amount of the loan to be granted to each maa it Is to the theory that the earning capacity of the borrower should be taken into account this Is thought to be best indicated by the number of dairy co cow con N a which he owns A member may thus obtain a loan to about 13 pel pet head of cattle fed and milked on the place the loans must bo be repaid la in from one to nine months interest must not according to the original law exceed 4 per cent per annum to the borrower danish bankers have reformed the fact that there are in Den denmark marli many banks which are organized for to the sole purpose of meeting the needs of the farmers bos has awakened the dan ish banker to the fact that the rural credit is a big bu buel alness nese which he can not afford to ignore compared with the american banker the danish banker most decidedly haa reformed he ile does meet the needs of tho the farmer in a it manner which would 9 americans this Is true q the method in which be ho asslie 4 0 o financing operative cooperative co associations when the big Tri follum dairy assoria lion tion was formed for example it waa wal done in this way one hundred farm ere era most of them owners of large farms formed an organization for the manufacture of dairy products and fa tor the further purpose of supplying milk to the city ot of copenhagen these one hundred farmers were thiv owners ol 01 something like cows while they individually ba had d property real and personal they had bad no money which they wished to invest in a cooperative organization they therefore sent their leaders to the bank to borrow the mone money y they simply asked the bank for a loan of F on the note signed by these baders sn the bank did not no require the other members of the association to alga the note altho although tigh by the terms ot of the agreement into which all bad had entered in the formation of the operative cooperative co association all were liable jointly and rove rally tor for the debt contracted at the bank As a matter of course the bank made the loan to teje farmers at a low rate of interest can banks supply rural credit I 1 have said it ie to up to the banker to supply the american farmer with loans similar to those supplied to the european farmer but there are those who say that the joint stock bank can never meet the farmers needs as do operative cooperative co to credit societies and that operative cooperative co credit will come in spite of all the bankers can do dr charles mccarthy Is to of this number he bases his conclusion on these grounds first no joint stock bank can afford to tie its money up for lo 10 bolg period loatis as do tho the credit banks difese deposits are all short time depoe deposits its they have no way of hypothecating one is series e ri es of loans in order to raise money for another se ries rles second no moneymaking money making concern can possibly serve the farmers ai as do operative cooperative co credit soc societies lottes whose sole aim Is isto to aid the borroni borrower er and to pro hect hia bla interests interest r but in agriculture a system of rural credit cannot be a substitute for brains and busi business nees sense and a marketing system unless the farmer produces a grod product and sells it lt tc to ud tage his farming will be ai a failure E easy a 8 y 1 loans 0 ans w will I 1 I 1 I 1 a only nl y in make ak a I 1 it t a bigger failure cooperative co operative credit Is important but with it must come a better system of at marketing either operative cooperative co or otherwise which will rive give the f farmer arme r more mor 0 t than a n halt what la to paid for or the farm product and so far as we can learn co mar swung ie is tho system will do thie this |