THIRTY-THIRD BIENNIAL SESSION 
225 
have recognized over here. I started with the statement that our banks 
expect loans to be either renewed or paid back in thirty, sixty or ninety 
days. Now when the farmer plants his crop in the spring, corn or something 
of the sort, or orchard trees it may be that bloom in the spring season, it 
is nine or ten or twelve months before his farm is a going business unit; 
and if he borrows as a personal credit transaction he does not want it for 
thirty days, sixty days or ninety days, but he wants it for nine, or eight or 
seven months. If that change were made in our present banking system 
throughout this country, it probably would serve practically all of the pur- 
poses which the great mass of European banks serve. The present contest 
in Congress over the Glass-Owen currency bill has that under consideration. 
I note by this morning’s paper that one of the subcommittees of the Senate, 
one which has reported a separate bill, has recommended that banks be 
recognized for farmers, taking security repayable any time within five years. 
The House had it “repayable within one year,” and so on. In other words, 
Congress is now struggling with that personal short-time credit problem 
themselves, and this is why the commission will probably have very little 
to say on this question. 
There are, however, in Europe little societies or organizations among 
farmers for credit purposes. These are notable institutions; and I believe 
you could create them in this country by any Federal law, and personally 
I think — though I have no idea what the commission would do on this sub- 
ject and am not to be quoted at all — but personally I think it has never been 
proposed to secure from the national government, twenty-five or thirty 
thousand little credit associations; it is a sort of crossroads private business 
and not a national business. 
Now I want in the next two or three minutes left to refer to these credit 
unions, to give you an idea of how the farmers operate them among them- 
selves. A little group of ten, fifteen or twenty farmers in a country will 
come together and say, “Let us create a credit union.” Now it does what? 
It is simply that those twenty farmers know each other, they know approx- 
imately what each one is worth — the same as I know in my home town- 
ship what every farmer is worth approximately. They just say, “Now instead 
of each one of us going down to the bank and borrowing $50, $75, $100, $200 
on two or three months, let us each put down an estimate of what we will 
want during the growing season, the crop year, approximately, taking it in 
January, February, March and so on each month of the buying time, what all 
want.” Then each looks over the list and states whether or not he con- 
siders that any farmer is going to try to borrow more than he ought to 
borrow. That is a reasonable thing. It is letting each other into each 
other’s business a little more than we are accustomed to do, but that is 
what they do. They thus form a co-operative society, really a rating society, 
and then the body as a body borrows each day, week or month whatever it 
may want, and in turn lends it out to the member who wants it. This 
little credit union is really a sort of a go-between. In their own way the 
loans are paid. 
