FARM FINANCE 137 



capital "was kept strictly within the limits of safety, 

 and this would give a complete guaranty to the sound- 

 ness of the issue. 



The commission recommends as a bank best suited 

 to the people of this country an institution with a foun- 

 dation share capital limited to loans on agricultural 

 real estate within a circumscribed area. The minimum 

 capital should not be less than $10,000, with compul- 

 sory increase, either by accumulation of surplus funds 

 or sale of capital stock in proportion to the increase in 

 the volume of its business. 



Also, in the judgment of the commission, any legis- 

 lation providing for the establishment of land mort- 

 gage banks should authorize the establishment of co- 

 operative as well as private joint-stock institutions. 

 Any attempt to force all of our rural banking institu- 

 tions into one rigid form would probably f aiL In these 

 cooperative or private stock banking institutions there 

 should be no difference in the methods of doing busi- 

 ness, the only difference being in the form of organiza- 

 tion. 



STATE AID TO BUHAI, CREDIT. 



The question of state aid to rural banking systems 

 is one of great significance. In this country there has 

 been a persistent opposition to the aiding of any bank- 

 ing system by the nation or the State. Nevertheless, 

 the country has been honeycombed with state banks, 

 and in former years with most disastrous effects in some 

 of the States. The State will have a greater interest 

 in a banking system in which it has a financial interest 

 than it can have in any other way. Therefore, as a 

 means of security and conservatism of administration, 

 it seems advisable that the nation or the States should 

 extend some financial aid to the banking system. 



