1912. 
THE RURAL, NEW-YORKER 
1229 
AGRICULTURAL CREDITS IN EUROPE. 
No. 6. 
We have briefly analyzed the coopera¬ 
tive land mortgage systems of the 
principal countries of Europe, including 
Ireland, France, Germany, Switzerland 
and Denmark. We might go on into 
Italy, Austria, India and Russia; but 
their systems were mainly copied from 
the systems we have discussed, and we 
would find little new except some modi¬ 
fication to suit peculiar local conditions. 
In Ireland we found the government 
loaning the farmer the full purchase 
price of his farm on a 68-year payment 
plan, and to be exact, the annual pay¬ 
ments being $3.25 per hundred or 3%. 
per cent. The proprietor thus pays 3%. 
per cent, on the purchase price of his 
farm for 68 years, and the farm is then 
his free and clear. Not only this, but 
the. law enforces the sale in many 
instances. This is the most extreme 
system of government help, no doubt 
brought about through a reaction of 
sentiment owing to the previous de¬ 
pression due to landlordism and gov¬ 
ernment oppression. In France we find 
the Credit Foncier organized under spe¬ 
cial laws, and favored by a government 
subsidy, and other privileges to earn 
money on real estate with an original 
monopoly of land mortgages for 25 
years. This bank raised the money 
through sale of debentures. The mort¬ 
gages are written for 10 to 75 years, 
with annual payment to form a sinking 
fund. Of course the longer the mort¬ 
gage has to run the smaller the an¬ 
nuity. Fof 75 years the annual payment 
is $4.48 and the land is clear after the 
last payment is made. In Germany we 
have found the Landschaften societies, 
dating from the middle of the eigh¬ 
teenth century, when the society was 
virtually forced upon the impoverished 
landed estates by a forceful monarch, 
and since adopted by all classes of 
holders, but for the most part each so¬ 
ciety confining itself to farmers of a 
given class. Some of these societies have 
received government aid, and others have 
been quite independent of financial help. 
In Germany we also found independent 
banks loaning to farmers on long terms 
at low interest rates without government 
subsidy, but under very strict govern¬ 
ment supervision, which virtually in¬ 
sures the value of their debentures, and 
establishes public confidence in them. 
We found similar land mortgage 
banks in Switzerland with the provision 
that the authorities are required to 
certify to the application, and the com¬ 
mune becomes responsible to the bank, 
if it can be proven that the application 
was false. In Denmark we found the 
most approved form of cooperative 
land credit. Here the farmers band 
together and pledge their united and 
unlimited credit to the debentures which 
they sell, and loan the proceeds to them¬ 
selves individually. They neither ask 
nor receive government subsidy. In 
fact they have in some cases refused 
to consider a suggestion for subsidy, on 
the ground that their present methods 
conserve safety in loans and market 
the bonds at better advantage than they 
could with the handicap of a subsidy. 
They are a society of borrowers with 
unlimited liability; and this is the pres¬ 
ent form of cooperative credit. Their 
annuities run from four to 4j4 per cent, 
on 60 year mortgages. 
The observant student has already 
discovered the common feature running 
through all these plans; namely, deben¬ 
tures and a sinking fund and annual 
payments, the last two features are 
what is known as amortization, or kill¬ 
ing the debt. There must be no ques¬ 
tion about the security of the deben¬ 
tures. In the case of the exclusive so¬ 
ciety of borrowers, where the whole 
property becomes liable for the deben¬ 
tures, membership is subject to scrutiny, 
and not more than 60 per cent of the 
value of the property is loaned on the 
mortgage, so that all the mortgaged 
property of the members becomes se¬ 
curity to the debentures. In the case 
of the purely mortgage banks, the mort¬ 
gages, and the capital, and surplus of 
the bank form the security for the de¬ 
bentures, but in all cases the security 
is increased through the amortization 
feature. In case of the Landschaften 
society of borrowers, the interest rate 
on the -mortgage is always the same as 
the rate, on the debenture. There are 
no salaries except for bookkeeping, and 
the little necessary expense incurred in 
conducting the business is assessed on the 
members, or a membership fee is levied 
to cover it. In the case of the banks 
the rate is the same as the interest on 
the debentures plus a small percentage 
for expense. In the case of the Credit 
bonder of France this extra percentage 
is about one-half of one per cent. The 
bank has greater expense in administra¬ 
tion than the Landschaften society, 
but having a greater volume of business 
the extra rate is not burdensome. In 
all cases the volume of debentures sold 
must equal the annual mortgages held—• 
no more and no less. The Landschaf¬ 
ten society is well adapted to the Euro¬ 
pean countries where there are many 
small holdings, and societies may be 
formed among farmers of the same 
class with practically equal holdings of 
a few acres each, and all engaged in 
the same line, such as gardening. Each 
one being responsible to the extent of 
his entire holding, is personally inter¬ 
ested to see that each of the others gets 
no larger mortgage than he is entitled 
to, and that interest and payments are 
kept up, and the property kept in pro¬ 
ductive condition. This personal con¬ 
tact and personal interest creates a con¬ 
servative management, and avoids the 
expense of appraisals and management 
that the banks must incur. 
The annual payment includes the 
interest and the small payment on the 
principal. This fixed annuity is paid 
each year, and as the mortgage and 
interest become each year less and less, 
the amount credited to the reduction 
of the mortgage becomes more and 
more, so that the mortgage is finally 
wiped out through an annual payment 
which is so small that at first thought 
it seems incredible. 
For us, my preference would be for 
a Federal law authorizing a system of 
farm credit banks through the whole 
country within State boundaries, and 
with one central national bank au¬ 
thorized to handle, and guarantee the 
debentures and finance the local banks 
generally, with such safeguards as 
would secure a sound and conserva¬ 
tive business based on the farm as¬ 
sets, but I do not think we can afford 
to wait for the national system. The 
States can fortunately take up and de¬ 
velop a system of land credits for them¬ 
selves. This will probably hasten. Na¬ 
tional action, and if advisable the State 
system can tnen be coordinated, w r ith the 
Federal plan. We would simply need a 
State law authorizing the creation of 
a local credit society, and a State bank 
with right to sell debentures, and take 
over the mortgage of the local organi¬ 
zation. This bank could also be au¬ 
thorized to loan individual farmers on 
an application certified to by the town 
officials after the plan that works so 
well in Switzerland. The loan to indi¬ 
vidual farmers would command a higher 
rate of interest than the association 
mortgages, because it would involve more 
expense and an individual risk rather 
than several joint securities; but it 
would give a farm borrower a choice of 
the two best and cheapest systems of 
mortgage credits yet devised. 
JOHN J. DILLON. 
CREDIT FOR FARMERS. 
Will you allow a lawyer who owns a 
farm to contribute some results from 
his experience and observation? Farm¬ 
ers may learn something from the ex¬ 
perience of other business. Many manu¬ 
facturers have not capital enough to 
run their business, and it is common for 
them to make an agreement with a com¬ 
mission merchant by which he loans 
money to the manufacturer, receives the 
manufactured goods on consignment, 
sells them, and out of the proceeds re¬ 
pays the loan, and turns the balance 
over to the manufacturer. The commis¬ 
sion merchant employs a competent per¬ 
son to watch the process of manufac¬ 
turing to see that it is done to the best 
advantage. Experience shows that this 
arrangement is advantageous to both 
parties. Improvements suggested by the 
merchant’s agent are often a great bene¬ 
fit to the manufacturer. His goods are 
sold to much better advantage than he 
could sell them himself, and he gets the 
capital which he needs. 
It seems to me that a similar arrange¬ 
ment could be worked out by a group 
of farmers in any county. If they 
would club together, get in touch with 
some of the commission merchants who 
make a business of selling farm prod¬ 
ucts, they could make an agreement by 
which money should be advanced upon 
their crops, and these crops should be 
consigned for sale to the commission 
merchant. Agreements could be made 
for lower freight rates, if the farm 
products were shipped by the carload. 
Of course the success of such a busi¬ 
ness would depend entirely upon the 
efficiency and good faith of those en¬ 
gaged in it. But this is true of every 
business. There are many commission 
merchants who do their business well' 
and honestly. Every farmer who has 
had experience knows who the commis¬ 
sion merchants are that sell his products 
to the best advantage. In short, all this 
business can be done if the farmers will 
combine and work together in any par¬ 
ticular locality. There is nothing that 
the Federal Government can do for 
them except possibly to investigate the 
subject. The Federal Government has 
no more power to charter societies for 
the purpose than it has to run a district 
school. If incorporation should be 
needed, the State laws offer ample fa¬ 
cilities for the purpose. It is not new 
legislation that is wanted. It is really 
co-operation among the farmers. 
Your correspondent, G., asks: “What 
is needed to save the life of a co¬ 
operative institution if it does happen 
to be a profitable concern?” My answer 
is watchfulness on the part of those en¬ 
gaged in it. I know of a small co¬ 
operative real estate company that is 
profitable and has lived for many years. 
In all probability it will live for many 
more, because the stockholders watch 
the managers and see that their business 
is done right. everett p. wheeler. 
R. N.-Y.—This is now done to a large 
extent in growing fruit or truck crops 
in the Southern States. Commission 
men frequently advance the money 
needed and handle the crop at least 
until their claims are satisfied. 
NEWS NOTES. 
Farm and Garden.— The public Winter 
meeting of the Massachusetts State Board 
of Agriculture, for lectures and discussions, 
was held at Union Hall, South Framingham, 
Mass., December 3, 4 and 5. The first day 
was devoted to dairying, the second to 
fruit and the third to market gardening. 
The twenty-seventh annual meeting of 
the Oregon State Horticultural Society was 
held at Portland, November 20-22. The 
North Pacific Land Products Show was 
hold at Portland the same week. 
The annual meeting of the Percheron 
Society of America was held at Chicago 
December 2. 
_ A forestry school, in connection with the 
Wisconsin College of Agriculture, at Madi¬ 
son, W is., will be opened January 7. Com¬ 
plete courses in range and nursery work 
will be given. 
Negotiations are reported under way to 
ship the surplus sludge from Leeds, Eng¬ 
land, sewage works to Canada for use as 
fertilizer by fruit growers. The plant for 
pressing this sludge into cakes was in¬ 
stalled live years ago. The annual produc¬ 
tion is approximately 35,000 tons. Farmers 
in Yorkshire take 15,000 tons of this, pay¬ 
ing only cartage charges of 00 to 75 cents 
a ton. 
The plan of working out a cooperative 
basis for the marketing of delicious fruits 
of the Northwest at a meeting of repre¬ 
sentatives of all districts in Spokane, De¬ 
cember 10, will meet with practically unan¬ 
imous support by the growers of the 
lakima Valley. The scheme will solve the 
problem on which a joint committee from 
the \akima Valley Fruit Growers’ Associa¬ 
tion, the Yakima County Horticultural 
Union and the bankers of North Yakima 
has been working. 
The seventh annual Farmers’ Week at 
the Pennsylvania State College will be held 
December 20, 1912, to January 2, 1913. 
Every effort is being put forth to make 
this the best farmers’ week the college has 
ever had. Over 150 subjects, relating to 
all branches of agriculture, will be dis¬ 
cussed. Three periods each will be devoted 
daily to agronomy, animal husbandry, 
dairy husbandry, floriculture, fruit growing, 
market gardening, poultry, forestry and 
home economics. During one period each 
day and in the evenings those in attend¬ 
ance will be assembled into one section for 
round-table discussions on subjects of gen¬ 
eral interest. The faculty of the School of 
Agriculture will be assisted by a number 
of well-known specialists from this and 
other States. Among these are, J. G. Lip- 
man, director, New Jersey Experiment Sta¬ 
tion; James E. Itice, Cornell University; C. 
G. Williams and B. E. Carmichael, of the 
Ohio Experiment Station ; C. II. Eckles, of 
the University of Missouri, and others. 
The Pennsylvania State Cattlemen held 
their annual meeting at Harrisburg De¬ 
cember 4. 
The first annual North Dakota Country 
Life Conference will be held at the North 
Dakota Agricultural College, Fargo, Decem¬ 
ber 17-20. The conference will be held at 
the same time and in conjunction with the 
North Dakota Boys and Girls Institute, 
thus giving the people who attend an op¬ 
portunity to see what is being done in 
North Dakota, to keep the boy and girl on 
the farm. The object of the conference is to 
bring together those who have been ac¬ 
tive in bettering social conditions in the 
country, to discuss the efficiency of insti¬ 
tutions peculiarly rural in their character 
and to demonstrate with social features 
whenever possible. 
National Grange Meeting. —The Brauer 
plan for a $10,000,000 corporation for di¬ 
rect cooperative marketing of farm prod¬ 
ucts was voted down by the National 
Grange_ at Spokane, Wash., November 21, 
after a sharp light. In place of the Brauer 
plan the Grange indorsed a plan for State 
and national bureaus of information as the 
first step toward cooperative marketing of 
farm products. By this plan the State 
Grange will establish a bureau, which Sub¬ 
ordinate Granges will keep informed as to 
marketing conditions. This information will 
be furnished to all the Subordinate Granges 
and to the national bureau of Information 
to be operated in connection with the office 
of national secretary, which in turn will in¬ 
form other State bureaus. A resolution in¬ 
dorsing the Senate bill providing for a bu¬ 
reau of markets in the Department of Agri¬ 
culture was adopted. The next National 
Grange meeting will be held in New Hamp¬ 
shire. Mr. Creasey introduced a resolution 
favoring the organization of a Grange life 
insurance company based upon a legal re¬ 
serve, and asked that a committee of three 
be appointed to investigate the merits of 
the several propositions offered on life in¬ 
surance, with power to recommend one of 
them or suggest a plan that will meet the 
needs of the several State Granges. Re¬ 
ferred to committee on insurance. 
Postal Expenses.— Political campaign 
material transmitted free of postage 
through the mails accounted, according to 
Postoffice Department records, for the dif¬ 
ference between a postal surplus and a 
postal deficit for the last fiscal year, ended 
June 30. An account of franked mail for¬ 
warded for Congress, the executive depart¬ 
ments and other government establishments 
shows that postage at the ordinary rate on 
this matter would have netted the govern¬ 
ment nearly $20,000,000. About $3,250,000 
of this would have been paid on political 
documents. The postal service handled dur¬ 
ing the year 310.245,000 pieces of franked 
mail, weighing 01,377,000 pounds. This 
was 3.8 per cent, of the total weight of all 
domestic mail carried. During the Presi¬ 
dential and Congressional primary cam¬ 
paign in the last quarter of the fiscal year, 
as disclosed by comparison with the 
amounts of free matter handled during 
corresponding periods of previous years, an 
extraordinary amount of franked matter 
was sent through the mails at public ex¬ 
pense. This matter consisted of political 
speeches, reports and documents of all 
kinds, and even of one complete political 
campaign book, all of which had beeu made 
technically frankable by insertion in “The 
Congressional Record.” It is estimated that 
the total weight of this franked matter was 
between 7,000,000 and 8,000,000 pounds, all 
of which was transmitted as first-class 
mail. 
New Story by the “Hope Farm Man” 
“THE CHILD” 
One would think the “Hope Farm Man” 
ought to know something about children, 
though he does not pretend to be a novelist 
FROM THE INTRODUCTION: 
7"E shall agree regarding the weakness and limitation of this 
simple record as a story. I hope we may also agree regard- 
” " ing the thought and spirit which I have tried to put into these 
pages. Many of us come to middle years feeling that something has 
dropped out of life. We may have reached a fair share of what we thought 
in other years would mean success, yet somehow it seems tasteless and 
without flavor. We do not always know it, but what we have lost is the 
spirit and hope of youth. The great vital problem for the farmer of 
middle years, particularly the well-to-do farmer, is how he may regain 
something of this conquering spirit of youth. This is the great problem 
not only for the individual but through him for the nation—since the farm 
home and what it stands for is the nation’s foundation.” 
The Story will be ready for delivery early in December 
The Rural New-Yorker 
409 Pearl St., New York City 
