COOPERATIVE LAND BANKS 461 



successfully applied by Herr Raiffeisen and his co-workers 

 of his own country and of France and Italy are so broad 

 and sound that with proper adaptation to suit American 

 conditions they should form a basis for the rural credit 

 legislation of both state and nation. 



The excellent record of our building and loan associa- 

 tions and of our mutual savings banks shows that the co- 

 operative principle in banking can be extended to serve 

 our farmers in a more vital way. 



We need an agency which will aid the deserving man 

 without property to borrow small amounts for provident 

 purposes at low rates and on easy terms for repay- 

 ment, the personal security being based largely on 

 character, thrift, industry, and sobriety. We need an 

 association of good members rather than a large supply 

 of capital. 



The first state to pass a law to provide for an adequate 

 system of rural credits was Massachusetts. This was in 

 the year 1909. The Massachusetts law, however, while 

 based on the Raiffeisen idea and on the well-known prin- 

 ciples of our savings and loan associations, provides for 

 credit unions in general and is not restricted to credit ac- 

 commodations to farmers. The credit union considers the 

 object for which the loan is to be used quite as much as 

 its security. It seeks to discourage unwise borrowing. 

 As M. Desjardins, a celebrated Canadian student of rural 

 credits, observes, " It tries to transform moral qualities 

 into valuable assets and brings to the industrious and 

 thrifty man a higher reward than mere wages the con- 

 fidence of his fellow men." 



In 1915 Massachusetts authorized the establishment of 

 farm land banks with a capital stock of not less than 

 $50,000. ' These state land banks may issue debenture 

 bonds (instruments issued as evidence of debt) based on 



