Seventy-Third Annual Report 1209 



As I have said, tins can only be done with capital and the 

 farmer has to face, in the qnestion of finding capital, two different 

 classes of demand — tirst, the necessity for long-term credit, and 

 second, for short-term credit — the long-term credit to add to 

 his area of cultivation, clear the ground and prepare it for cul- 

 ture ; the short-term credit to tide over intervals between crops, 

 to supply him with ready money during the period while he is 

 waiting to harvest his crop and reap the proceeds of it. In 

 Europe they have dealt with both these prol)lems. They have 

 been compelled by the very necessities of their situation, by the 

 political and economic competition between nations and by the 

 struggle for existence, to apply the most intensive capacity of 

 the finest men to develop the farming resources of the country. 

 As has been said by a previous speaker, France bas instituted 

 agricultural education. In Germany the system of local coopera- 

 tive credit societies dates back to the time when the land was 

 laid desolate by the long and bloody wars of the great Frederick. 

 But in Germany the development of the form of society which 

 reaches down to the small farmer is comparatively recent. It 

 is so in Italy, where one of their greatest masters of finance has 

 worked out the problem of credit for the new Italy. In France 

 the present organizations of local cooperative credit date back 

 hardly further than 1894, and as recently as 1897 the bank of 

 France was required to set aside out of its surplus some 40,- 

 000,000 francs, or about $8,000,000, to be loaned without interest 

 to certain agricultural societies for the benefit of the farmer. 

 And that amount was doubled to $16,000,000 in the recent revi- 

 sion of the bank charter in 1911. 



In all these countries firm steps have been taken toward the 

 organization of local cooperative credit among the farmers. In 

 France perhaps more perfectly than in any other. But in the 

 other countries also — in Germany, Austria-Hungary and Italy 

 — there was organized at a somewhat earlier date effective ma- 

 chinery for extending credit for long terms. We have no such 

 machinery in this country. You farmers can mortgage your farms 

 now and then when somebodv has exactly the amount that vou 

 want to borrow, but your mortgage in the custody of the lender 

 is not a convertible securitv. He can onlv sell it when he finds 



