Show BORROWING CAPACITY what cooperation among far farm m lerg ers can do doto 0 improve their 60 borrowing r ro ing carcity capacity at banks is thus described jn in bulletin no factors actors effecting affecting interest rates and other charges on short time farm loans recently published by the U S department part ment of agriculture in some parts of the country where farmers if they obtained loans at all as individuals were compelled to pay very high rates of interest plans have been tried out under which groups of farmers have been able collectively to establish improved relations with banks in averal localities of the central western and miles they will expend about ranch a distance of about 12 rocky mountain r regions farmers have formed temporary agreements under which they act collectively as for approved loans of members the added security from these associations has enabled n members to obtain loans at reduced rates of interest another plan illustrated by what has been done in a texas c community 0 m involves a temporary a r agreement between a group of farmers and a bank but differs from the plan previously mentioned in that the added se carity consists of a reserve fund left with the hanker banker each borrower allows the bank to retain 5 per cent of his loan for a reserve fund which is held as a guarantee for all the loans made under the agreement and is returned to the farmers at the in termination of the agreement under another plan which has been employed in several communities of the northwest a group of business men agree to deposit a sum of money with a bank and guarantee the loans given to farmers for some specific and approved purpose in all s uch such pases cases farmers have been enabled to obtain credit on more favorable terms than usual in a number of localities in this country groups of farmers have organized cooperative credit associations or credit unions usually each credit union makes definite arrangements with some bank by which the latter hattei acts as a depositary and furnishes loan on specified terms thus thug brie one of the unions jiiN orth carolina receives 8 3 per cent interest from its banko bank A subject to check and 4 pe rc edyt on savings bivings accounts left on deposit three months or longer and pays 5 per cent interest on its loans from the bank the credit credi t union in turn pays its own members 4 per cent on their savings accounts and furnishes them loans at 6 per cent such a credit union not only accustoms its members to the use of check and savings accounts but also enables the members to obtain loans for approved productive purposes on better terms than they could obtain elsewhere 0 |