152 RURAL RECONSTRUCTION 



sufficient capital, which, to be sufficient, would have to be very- 

 considerable . 



The American Farm Loan Banks and Associations have lent out 

 considerable sums, showing how greatly credit for agriculture is 

 needed. But that has been in the main out of State advances. 

 And it is much too early to form a final judgment as to the success 

 of these institutions, quite apart from the point recently formally 

 raised of their legality under the Federal Constitution. And, seeing 

 how very different are banking conditions in all other countries, 

 certainly in our country, it cannot be said that, even if the American 

 scheme should be found permanently successful, it could in any wise 

 serve as a precedent for imitation elsewhere. 



The Act appears, however, to have proved very effective in 

 preparing the ground for co-operative credit. For, as was to have 

 been foreseen, American farmers are not content to have an Act 

 passed for their benefit administered for them by the authorities. 

 The Government proceeded, as now appears, wisely — of course, with 

 the assent of Congress — to make large sums of public money avail- 

 able for credit purposes, for the distribution of which it appears to 

 have looked mainly to the Farm Loan Banks, working each in its 

 own appointed district. Wisely, once more, the Government, 

 showed itself chary in authorising joint stock banks to serve as 

 intermediaries, putting off its sanctioning of them. The private 

 money subscribed in the shape of shares amounted at the outset to 

 only very little. However, farmers formed their " associations " — 

 of which there are now over 4,000. And these, employing the 

 Government credit, but working to a considerable extent already 

 with share capital and deposits, now rightly claim to have a voice in 

 the management. The obstacle to the application of the Act raised 

 by the grudging mortgage loan banks— which are, unlike the German, 

 used to a very high rate of dividend, and resent having the Farm 

 Loan Board money played off against them, under a provision to limit 

 dividend to 6 per cent. — has brought wind to the sails of this uprising 

 against Government tutelage. 



For all that, of course, the Farm Loan Act — which has attained 

 a certain degree of popularity — may be destined to prove very- 

 useful in the direction aimed at, especially as it is being administered 

 with an evident desire to put it to good use, by able men, experienced 

 in business, and evincing unmistakable interest. One may hope 

 that the ultimate result of all this fluctus will be bond-fide co-operative 

 credit, managed and financed by the farmers themselves. There is 

 a good prospect of this, now that the Farm Loan Associations, 



