The Camden chronicle. (Camden, S.C.) 1888-1981, April 24, 1914, Image 3
The Source of the Bank Account.
Co-Operative Farm
Products Marketing
nu-" '? jhmhmhhvmimb
How It Is Done in Europe and May Be Done
in America to the Profit of Both
Farmer and Consumer
By MATTHEW S. DUDGEON.
WILL THE BANKERS REFORM?
Copenhagen, Denmark.? The Ameri
can banker must, reform. If lie does
not hu will he up against it as aj'e
others who refuse to mend their ways.
'Hie American farmer cannot get
money of American bankers upon
terine suited to his needs. He is go
ing to have the money from some
source, if the hanker will not give
it to him he will organize a new kind
of a bank, for you may rest assured
that the American farmer is going
to have an opportunity to borrow
money upon some suitable basis. The
Irish farmer can get money on favor
able terms: the Belgian farmer co
operating with his neighbors doeB his
own banking; in Germany the co
operative banks do a business that is
astonishing in its volume; in Denmark
it is easy to get money for buying a
ffirm or* for temporary investment in
seeds.' fertilizers or' stock. The same
is true of the farmer in Italy' and
France; even in benighted Russia
farm' credits are cared for by co
operative organizations.
I)o the banker*? of America think
that the American farmer is going to
.<(>it?enl to continue to he the only
civilized agriculturist who has no ade
quate borrowing facilities. That is
not the American way. What, then,
can possibly prevent the formation of
cooperative credit associations all
over America? Nothing, except the
presence of some institution that will
do for the American farmer what co
operative credit is doing for the Ku
ropean farmer. If the American hank
er wishes to do the banking business
of America so far as the farm is con
cerned, he and he alone can give the
farmer this sort of an institution and
thus make co-operative credit socie
ties unnecessary. It is up to the
banker.
Capital for Farming.
Formerly when an American farm
could be acquired by . living upon it,
when horses and cows and Implements
were cheap^/and when fertilizers,
blooded stock, and special high-grade
seeds wore unknown, a young man
with comparatively little capital could
begin farming. Now considerable capi
tal is as necefieary to success in agri
culture as it is in the manufacturing
industries. Every wise farmer knows
that money judiciously expended in
better stock, better buildings, labor
saving machinery, pr?per fertilizers,
and good seed will net largo returns.
Hut it takes money to do these things.
Consequently there is a demand for
loans.
In America the farmer can seldom
K'H a loan on terms that meet hint
needs. In Iroland, Belgium, Germany,
Holland, Denmark, France, Italy and
elsewhere upon the continent the
banks have forced the farmers to or
ganize co-operative credit societies. In
many instances the government also
has aided the co-operative banks In
obtaining money for loans. These so
cieties are taking a safe, profitable
business away from the bank. Now
when It is too late the banks realize
their mistake.
The question Just now is this: Will
the American bankers forestall co
operative credit companies by meet
ing the needs of rural borrowers or
will they force the farmer to go Into
the banking business as did the bank
ers of Europe? It is up to them. Will
thoy beat co-operative credit banks
by beating them to it?
Buying Farm Easy In Denmark.
To buy a farm there are a number
of different methods open to the Dan
*?h farmer It must btt remembered
that in Denmark a farm is consid
ered as having live stock and imple
ment* used in working the land in
separably attached to it, hence the
Purchase price to be paid includes all
?vjuipment necessary to the operation
of tho farm and^alj^mort gages are se
cured by a pledge of this personal
property as well as of tho real estate.
It tho would-be buyer bee forty per
cent, of the purchase price he may
annly to a credit society for a long
time loan amounting to sixty per cent,
of the valno of the farm and all eqmip
m< ut and slock upon it. The loan may
run from forty-five years jo seventy- j
nine years. The borrower has Ills .j
, prospective purchase surveyed and as
| sessed.. He makes out a mortgage and
j delivers it to the co-operative society.
Tills mortgage and hundreds of oth- !
| ers like it are delivered to a trustee ;
with a trust deed which pledges them i
as security for a series of bonds'. The
co-operative society guarantees the
bonds also.
It is from the sale of these )>onds
that the co-operative society obtains
its funds. The&e co-operative credit
associations have in the beginning no
capital whatsoever. Each is simply
an agency whose functions are to see
(1) that the real estate security of
fered is assessed at its true value;
(2) that the title is clear; (3) that the
mortgages are properly executed;
(4) that they are grouped, pledged .|
and deposited with the trustee; !
(5) that the trustee issues bonds; ;
(6) that the land, buildings and equip- ;
ment are properly cared for and their
value le not permitted to deteriorate; ,
(7) that the paymeuts of principal and
interest are promptly met.
Easy Repayment of Loans.
The farmer pays from four to six
per cent, of the principal amount each
year. This is not wholly interest, how
ever, for it includes a small install
ment of principal, for the mortgages
are all amortization mortgages. Pay
ment of this fixed sum annually /or
semi-annually for the .fixed period
therefor automatically discharges the
debt. A sjnall amount out of each
payment is also set aside for reserve
for the do-operative society and for
an exi>ense account. It has been the
universal experience, however, that ;
the expense runs very low.
Still Easier for the Farm Laborer.
There aye other forms of loans evon
more advantageous to th$ borrower,
particularly if ho is one of the poorer i
farm laborers. If such a laborer seeks ,
to become a land owner on 1 a small
scale he may under certain conditions
secure a loan for nine-tenths of the j
value of the proposed purchase, being :
required to advance only one-tenth of
the purchase price in cash: The gov- \
ernment furnished the funds for these
loans. The conditions aro (1) the bor
rower, must have been engaged in ag
ricultural labor for five years (women
may take advantage of this law as
' wcli a? men); (2) the land must not
exceed ten acres in extent nor $2,.144 t
in value; (3) the borrower and pro
spective purchaser must agree to crop
the farm in a certain manner, dividing
it up into five or seven fields , and fol
lowing a certain rotation of crops, thus
insuring continual productiveness and
preventing deterioration of soil fer
tility. Under these mortgages the
borrower pays three per cent, interest -
with no installments upon the princi
pal for the first five years. Then he
pays, in addition to the interest one
per cent, upon two-fifths of the loan as
an Installment upon principal, doing
this until the two-fifths of the loan is
entirely discharged. Thereafter he
pays an annual Installment of one per
cent, upon the three-fifths remaining
of (It#* in Inclpul, thiw bHng In addi
tion ty IiIm three per cent. iutenwt
as before. 'I*tie bonds may bo issued
U|?oi? uitHl t* in |???d pa p?* r and arw free
from tax
Does (bo Danish farmer tuko advan
(age of (hesn opportunities? Are (be
tenant* becoming landowners? The
facts arn these- Denmark bua 2,600,000
population, soinew but les? (ban (bat
of t hit aK"' II ll6 R IbOilt 600,000 fiinii
Ilea, including it) 08? In cltlea and vil
lages uh well as tho?o In the rural r?
glonit. Th<&8e co operative credit soci
eties , have H membership of over
$00,000; (bat ih to May, i w?? out Of
every live fhjnllioe In (he entire conn
Iry uro represented in their). Largely
us u result of title credit system ninety
per fjQni. of (be fai innrh of ' Denmark
Own their g.yv i) land. . M
How Character Is Capitalized.
Obtaining u loan on personal secur
l(y bat) beeir euphoniously termed
"QupltgU'/liiii cbutiif'lcr." It is not an
? ? ; t p|iM,w Bluet- unv farmer who hjin
a. > ood cbntuctei:, \slio i<> a rob1 t> hon
est, Industrious, intidligi iH, productive
'Worker, bus a < ajntal that is 'consid
ered a proper baiH.ln for tn.dit and b"
i'. m in fact capitalize hit character,
Ilia fbaraotfi* Ih in very trull? under
these conditions bin capjiill. 1.1 e r< i*
ibc way if in dOtiehero in Denmark:
Uy (he law enacted in I NHS tlx* >;ov
ernment is au( boi ized t? tuni over t<>
tin- i ii dii a. -mm iatioii $1,250,000, lor
which the associations account to the
government at the rule of three per
cent, per 0 iin u m. This stun is placed
ut the dtRposal of the farmerH' credit
association in order that (best* asso
ciations may bo ready to give small
loans to their members. When any
farmer finds, it urgently necessary to
KCctrre a loan in order to meet ex- )
ponses such as (he payment oi wages, !
I lie price of bettor seed*, or of artifl- j
clnl manures. or of feed tor cattle, be
makes application to one of these as
sociations- hi determining the amount
of the loan to be granted to each man
it. ik the theory that (lie earning ca
pucity of the borrower should be taken
into account. This is thought to be
best indicated by the number of dairy
cowb which he owns. A member may
thus obtain a loan to about $13 per
head of cuttle fed and milked on the
place. The loans muBt be repaid in
.from one to nine montliB. Interest
must not, according to the original law
exceed Al/z per cent, per annum to
the borrower.
Danish Bankers Have Reformed. 7
The fact that there are in Denmark j
many banks which are organized for !
the sole purpose .of meeting the needs 1
of the farmers lias awakened the Dan- 1
ish banker to the fact that the rural j
credit is a big business which he can- 1
not afford to ignore/ "Compared with j
the American- banker the Danish
banker most decidedly has reformed, j
He does meet the needs of the farmer 1
in a manner which would surprise
Americans. This is particularly true
of the method in which he assists in
financing co-operative associations, j
When tho big Trifolium dairy associa- J
tion was formed, for example, it y/as !
done in this way : Oiu? hundred farm- j
ers, most of them owners of large
farms, formed an organisation for the
manufacture of dairy products and for f
tho further purpose of supplying milk 1
to tho city of Copenhagen. These one I
hundred farmers were the owners of i
something liko 12,000 cows. While;
they individually had uropcrty, real]
nod per?oiia|}," they had no monejTI
which they wished to inv?Mt In a co |
operative organisation. They tlttrt' |
font bent their leader* to the hank '
to borrow the money. They aimply j
asked the hunk for u loau of $l2f>,000 i
on the note signed by these leaders.
The hank did not require the other
member* of the association to sign
tin* note, although by the terms of the
agreement into Which itl I hud entered I
in the formation of the co-operative '
association nil were liable, Jointly and
?severally. for 'the debt contracted at,]
the hank Ah a mutter of course the!
batik made the loan to these farmers
at a low rale of interest, . *'?
A. moat ililerebtlUK feutury uf thla
transaction in the method of ropuyv !
jjnent. it was agreed that the loun
should extend over ? period of twenty '
year# with the privilege on the parti
or the association to repay out of its
profit each year a tmfllolont eum ho
thai at the end of the twenty yeara j
the debt should be discharged. At i
thin time the asocial itjn has been run
ning for twelve, yeara und Iiuh been
more than able to keep up Its amorti- ?'
/.at ion puyijifuitp. At (jo- end of eight
years niofe the debt wjth the bank
will he discharged. At Fred'tick.;
feund out Home little dfatuhce from
i 'opcnhKiteii, there i'tf a < o-bperatlvo
egg unsocial ion which Ik composed of
lO.tual farmers, Thcae lO.OOO larmera '
bad no capital -which tht?y wmhed to j
invent in an egg -packing and shipping
organization. Their leaders went to ;
the batik era as dUI the leaddrs of tho,
Trliolhmi dairy wHOdialioh und made1
a similar loan except that in the case
of (he lO.OOjLi^farmei'H.. who w lb lied to
mart an egg-packing establishment the I
period of repuyment was over a period
of ten years rather than twenty. This
r.enniR to be quite an ordinary prac
tice.
Can Bank? Supply Rural Credit?
1 ho-ve said It i? up to the bunker
o supply the; American farmer with
loans Hlmilur to those supplied to tho
European former. lJut the.ro arc thogp
Who Hay that the Joint stock bank can
never meet the farmer^ needs as do
co-operative credit societies and that
co-operative credit will come in spite
of all the banker** can do.
Dr. C'harle? McCarthy in of this
number. He bases his conclusion on
these grounds: First, no joint block
bank can afford to tie its money up
for long-period loans as do the credit
banks. These deposits are all short
time deposits, They have no way of
hypothecating one series of loans in
order to raise money for another se
ries. Their system of finance is not
sufficiently elastic to lend itself to tho
transactions demanded in an adequate
line of rural credit.
Second: No money-making concern
can possibly eerve the farmfers as do
co-operative credit societies whose sole
aim is to aid the borrower and to pro
tect his interests.
Hut m agriculture a system of riyfcil
credit cannot be a substitute for
brains and business sense and a mar
keting system. Unless the farmer pro- j
duces a good product and sells it to ]
advantage his farming will he :\ fail- |
Ure.; HJasy loans will only make it |
a bigger failure. Co-operative credit !
Is important, but with it must come \
a better system of market big either
co-operative or otherwise, which will
give the farmer more than half what
'.3 paid fcr t heparin product. And so
??r as we ean learn co-operative n;ar.-_i
Keting is tho system which will do thi? i
WE CAN SELL
No. 301 DeKalh Street, South Side
130 Front by 330 Deep
$3,500.00
A Desirable H ome Site, A Good Investment.
This proposition for immediate sale.
Williams Insurance & Realty Co.
Iih or|ior#lfd)
CAMDEN, S C. /
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WANTED -To Buy Cattle
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Camden Beef Cattle Farms
FRED E. PERKINS, Special Partner E. I. GUION, Proprietor
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