REPORT OF THE SECRETARY OF AGRICULTURE. 21 



The possibilities of well-directed cooperative effort amonr; farmers 

 are well illustrated by what has been done in the field of mutual fire 

 insurance. There are at present nearly 2,000 farmers' mutual fire 

 insurance companies in the United States, with outstandinf]^ risks 

 aggregating $6,000,000,000. This enormous volume is carried at an 

 average cost, for the country as a whole, of only 25 cents per $100 per 

 year, and, in individual cases, companies of this kind have furnished 

 high-class protection to their members for half a century or more at 

 a cost of less than 10 cents per $100 per year. This result has been 

 achieved, in part, by the elimination of unnecessary expenses of op- 

 oration, of the so-called moral hazard, and of many of the physical 

 hazards involved in farm risks. 



While the department has rendered much assistance in connection 

 with this form of cooperation, through the preparation of a sug- 

 gested classification of farm risks and suitable record forms which em- 

 body the methods and practices that have proved to be most efficient 

 in conserving farm property and in reducing the cost of insurance, a 

 great deal remains to be done. In many States, cooperation for in- 

 surance and credit purposes is as yet little understood or practiced. 



PERSOXAL CREDIT. 



I 



It is generally recognized that one of the problems demanding 

 special attention at this time is that of short-time personal credit 

 for farmers. In the case of a man who has paid for his farm, 

 the supplying of personal credit raises, as a rule, no serious ques- 

 tion. In the case of the renter, however, and of the young farmer 

 who is just starting out as an owner, the question of short-time 

 credit is a difficult one. In such cases, credit can and should be 

 based, to a considerable extent, upon character and productive 

 ability. To deny credit to the honest, ambitious, and energetic 

 farmer because he has little tangible security to offer is to les- 

 sen the productivity of available capital and to discourage a man 

 who, in the future, should be a land-owning farmer. While the 

 bankers are, in many cases, showing a commendable interest, the need 

 is for a system which will enable the man without collateral to secure 

 funds for productive agricultural enterprises. Without doubt, this 

 important problem sliould receive careful consideration, and every 

 feasible effort should be made to aid the farmer in obtaining the 

 necessary personal credit. 



THE I'ROHLEM OF FARM OWNEUSHH'. 



Closely related to the c redit question is the problem of land owner- 

 ship, to the solution of which national thought will, of necessity, 

 be directed during the years that lie inmiediately ahead. It involves 



