XIV 



RURAL CREDITS 



Introduction 



Undoubtedly a careful study of the rural credit institutions of 

 Europe is an important aid to us in working out better arrangements 

 for the United States. That does not mean that we should devote 

 all our time to reading the inspiriting accounts of what has been 

 accomplished somewhere in Germany or somewhere in France by 

 Landschaft bank or co-operative credit union. Before we shall evolve 

 a satisfactory working system for American farmers, we must gain a 

 deep and intimate acquaintance with our many differing local situa- 

 tions, and learn how to operate the old institutions better if they are 

 still serviceable, as well as learn how to get the greatest efficiency from 

 such new institutions as are coming into the field. 



The present chapter, therefore, aims to go back a step in order to 

 examine the manner in which our rural credit problem has come to 

 its present posture, and the way in which credit needs have been met 

 (however imperfectly) up to the present time. Sections A and B 

 serve to give us a little perspective on the problem by taking us back 

 over the last generation, showing how farm indebtedness began and 

 how private money lenders, merchants, and banks have been serving 

 or exploiting the farmer's imperative need of capital. 



Taking these sections with the one that follows (C), it appears that 

 there has been a considerable development of these agencies in recent 

 years. This reveals the present problem as not so much one of 

 fashioning from whole cloth some new type of rural credit institution, 

 but rather the conserving and co-ordinating task of standardizing the 

 practices, enlarging the vision, and perhaps integrating the organiza- 

 tion of agencies already established in a position of usefulness. Section 

 C shows several important points at which this work of rehabilitation 

 has already made distinct progress. As to just what direction it should 

 take or how far it should go, opinions differ, of course. Section D 

 has space only for two of the issues co-operation and state aid. 



Undoubtedly the greatest difficulty in the farmer's position in the 

 past has been due to his lack of ready access to the loan markets of the 



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