COOPERATIVE LAND BANKS 457 



to land, are not well adapted to raising money for buying 

 seeds, tools, fertilizers, and household supplies, for the 

 reason that the long time the mortgage usually runs, from 

 three to five years, is not well suited to such purposes. 

 Neither do the terms of bank loans nor their rates suit the 

 needs of farmers. A farmer must often pay from four to 

 six per cent more interest than the manufacturer. For 

 these and other reasons there are coming into existence in 

 this country, as there have been in Europe for more than 

 half a century, banks known as cooperative land banks. 



330. Cooperative Land Banks. The following are the 

 chief characteristics of cooperative land banks. 



1. They are organized and managed by and for the 

 farmers themselves. 



2. Loans are made to farmers at the lowest possible 

 rate and for as long a time as needed, but for provident 

 and productive enterprises only. 



3. The funds for these loans are borrowed mostly from 

 outside sources. Some cooperative banks sell stock to 

 members to raise some of the funds. 



4. The security required is personal, a responsible 

 neighbor or two indorsing the note of the borrower. 



5. Each member is jointly liable for his share of the 

 debts of the bank, and in Europe that liability is often 

 unlimited. 



6. The sphere of activity of each of these banks is 

 local, what we might call a school district, each member 

 thus being able to investigate the purpose for which the 

 loan is to be made. 



These are the main characteristics of cooperative 

 banks as they have been organized in Europe. We can 

 understand much better the great part they can play in 

 farm finance if we learn the thrilling story of Herr 

 Raiffeisen. 



