Rural Credit 283 



In case of the loan and trust companies which often 

 act as brokerage agents in placing and handling loans, in- 

 surance companies, savings banks, and other similar cor- 

 porations, the investments are of a more permanent char- 

 acter, and these institutions accept farm mortgages as 

 security for long-time credit at reasonable rates of interest. 

 They do not often extend credit for short periods of time. 

 The state banks and private banks desire to turn over 

 their capital rapidly and do not as a rule loan money on 

 long-time mortgages on farm lands and do not accept 

 land as security for short-term loans. These institutions 

 do loan money on proper security such as notes or stock 

 certificates, chattel mortgages, and other personal security, 

 for short-time loans. 



THE NEED OF A BETTER RURAL CREDIT SYSTEM 



There is less need of a distinctive rural credit system in 

 the United States than there was when cooperative credit 

 systems originated in Europe. While there are many 

 abuses in handling credit available to farmers, and the rate 

 of interest may be high when compared with loans extended 

 in commercial business, the local and state banks that have 

 been organized in nearly every town of several hundred 

 inhabitants, especially in the northern and western parts 

 of the United States, furnish credit to the farmers on per- 

 sonal notes, chattel mortgages, mortgages on realty, or 

 other acceptable security. In the country these banks 

 are often owned and managed by farmers and are organized 

 and operated primarily for rural credit purposes. There 

 is great competition among these local banks, and every 



