AGRICULTURAI, CREDIT AND CO-OPERATION IN EUROPE 89 



an}^ one member shall be limited to 10 per cent, of the total share capital ; 

 (2) each member shall have one vote only irrespective of the number of 

 shares held ; (3) the shares may be of the nominal value of $ 25 ; (4) the net 

 earnings of a co-operative bank shall, after paying a dividend to the share- 

 holders at the current rate of interest, be distributed among the patrons of 

 the bank pro rata to their borrowings, provided, however, that if so agreed 

 upon by the members, the distribution to patrons who are shareholders 

 may be made at twice the rate at which distributions are made to non- 

 shareolders. 



The object of the last mentioned provision, as is pointed out in the 

 Report, is to induce patrons of a co-operative bank to become share- 

 holders in it, aid it is, of course, with the same object that the minimum 

 value of the shares is fixed as low as $25. 



The minimum capital required, however, is the same for a co-operative 

 bank as for a capitalistic bank, namely $10,000. 



It is suggested in the Report that as any co-operative banks which 

 might be formed would probably be small, the shareholders should be per- 

 mitted to assume more extended liabihty than the shareholders in capital- 

 istic banks, and, under Section 31 of the BiU, the members of a co-oper- 

 ative bank could assume unlimited hability, provided such a course were 

 approved by a two-thirds majority of them. 



It is evident that the members of the Commission see no reason for re- 

 garding the business of dealing in land mortgage loans, under the condi- 

 tions which are found in the United States, as a field of activity in which it 

 would be advisable to encourage the development of co-operative instit- 

 utions at the expense of capitalistic enterprise. 



It must be remembered, however, that it is proposed to allow co-oper- 

 ative mortgage banks to engage in a general banking business with and 

 for their own members, and the Commissioners evidently expect that full 

 advantage would be taken of such permission. In this connection they 

 say : " This provision, were it enacted into law, will not confer the advan- 

 tages of an unlimited Federal charter but it will give great encouragement 

 and opportunity to the development of co-operative business organization 

 among farmers. It is presented by the Commission as being the smallest 

 advance which should be granted by the Federal Government at this 

 moment to the new movement in the rural Ufe of our Nation ". 



The proposals which we have outlined above deal only with the problem 

 of land credit as distinguished from agricultural credit. In an early num- 

 ber of the Bulletin we hope, with the further Reports of both Commissions 

 before us, to return to a consideration of the whole question of financing 

 agriculture in the United States. 



