84 Missouri Agricultural Report. 



each community — a combination exclusively of farmers for farm- 

 ers, where, with unlimited liability, they join together, borrow- 

 ing money on their joint liability, as they could not borrow so 

 favorably as individuals. This is known over Europe as the 

 Raiffeisen system, and some believe that such a system would 

 grow and flourish here. It would be interesting to see it tried 

 out, and the result might be beneficial in developing the business 

 ability and vision of our farmers as well as in bringing more 

 favorable financial aid. 



However, with the independent and individualistic ten- 

 dencies of our people, and the thousands of country banks we 

 already have, I cannot believe this system would appeal broadly 

 to our farmers. In any event, it could not produce, promptly, 

 the tremendous volume of money needed to carry on the im- 

 proved, up-to-date farming we must adopt, and that requires 

 heavy investments in fertilizer, live stock, more and better 

 machinery, buildings and other farm improvements. 



The better method, it would seem, could come from land 

 mortgage banks to be provided by state or federal law, or both, 

 whereby they could be organized and properly regulated and 

 supervised just as is now done with our state and national banks. 



This is the system followed by the Credit Froncier of 

 France. In the same line the German law of 1899 provided for 

 the chartering of private joint stock mortgage banks that now 

 carry $2,618,000,000 in mortgages, being five times the amount 

 carried by the Landschaften banks organized more than a hun- 

 dred years before. 



The method under which these loans are made is certain to 

 appeal to our farmers. It is on the basis of long terms with 

 annual payments which, while a little more than a fair interest 

 rate, at the end of a thirty or fifty-year term will pay out both 

 interest and principal. 



For example, a thousand dollars is borrowed for thirty years 

 at 5 per cent interest. Then by paying, say 2 per cent additional, 

 or 7 per cent, or a total of $70.00 annually, the entire interest 

 and debt would be met in the 30 years. For convenience it 

 would be provided, say for sixty semi-annual payments of $35.00 

 each. Of the first payment of $35.00, $25.00 goes to pay inter- 

 est, $7.35 to reduce the principal and $2.65 to pay expense and 

 profit. On the sixtieth and final payment eighty-seven cents 

 pays the interest, $31.48 pays the last of the debt and $2.65 the 



