LAND AND AGRICULTURAL CREDIT IN EUROPE.

It is the purpose of this report to give but a brief description of the land and agricultural credit associations and corporations in Europe, their origin, development, and relations to the State, the laws creating and governing them, the results obtained for the farmer and investor, and a few suggestions for improving the land and agricultural credit facilities in the United States. The investigation conducted thus far warrants the conclusion that land and agricultural credit are so thoroughly organized in most of the European nations that real-estate securities are as liquid and sound as municipal bonds, while the honest, capable, and industrious farmer is able to supply himself with working funds for short or long time when desired. The institutions and also the systems devised for these objects have certain basic features in common but vary considerably in type and thereby show a remarkable adaptability to all sorts of social and economical conditions, such as exist in America. The rates of interest at which they are able to obtain and lend money fall even below the European commercial rate and are about one-third to one-half less than what prevail in the United States.

Farmers in many parts of Europe are as familiar with the credit and banking business as the tradespeople in towns and cities, and the great bulk of their loans have been made on personal or chattel security. The loans secured by land mortgages, as a rule, are not repayable in lump at the end of a few years, but run on for 30 or 50 years and are gradually wiped out by small semiannual payments, coming out of the income of the property. Foreclosures are infrequent, and no company dealing principally in these so-called long-term "amortizable farm loans has failed or occasioned loss to investors in recent times. Farm paper and mortgage bonds are considered investments of the safest sort the latter being listed on the bourse, or stock exchanges, and having an international market.

This almost complete organization of land and rural credit in advanced European nations was not a haphazard and spontaneous growth. It was brought about by the insistence of public and private individuals, philanthropists, scholars, bankers, legislators, agricultural societies, government commissions, and national assemblies, all studying and working in a common cause. The history of their efforts in the middle of the past century reads much like an account of the agitation which has been started in the United States by the American Bankers' Association, the Southern Commercial Congress, the Federal authorities at Washington, and other bodies and individuals, for financing the farmer, improving agricultural conditions, and encouraging the movement back to the soil. In Europe the agricultural banks and credit facilities were created before agricultural or even general education was attempted. The United States began at the opposite end. The American colleges and systems for teaching agriculture are among the oldest and best in the world, and millions of dollars have been appropriated by the Federal and State Legislatures since the passage of the Morrill Act in Lincoln's administration to aid this science in one way or another. Incalculable good has come therefrom, but the results would have been far greater if financial education had gone hand in hand with this work. It would have led to the study and introduction of the rural banking methods of Europe generations ago, and so familiarized the American farmers with the uses of credit that the lack of capital and excessive interest rates would not now be interfering with the agricultural development of the country.

COOPERATIVE CREDIT ASSOCIATIONS.

Personal credit in agricultural Europe is obtained usually by means of the cooperative credit associations. They are also used by artisans and small tradespeople in the towns and cities. These associations are in fact the only banks 465

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up new areas, and introducing modern methods of cultivation; and it is of vital importance that this capital be obtainable at once in sufficient volume and on easy terms. The world-wide problem caused by the pressure of population upon the means of subsistence now confronts the United States in the very face of its matchless natural resources and vast acreage of arable lands still remaining untouched by the plow. The $385,000,000 of foodstuffs exported last year barely equaled 76 per cent of the annual interest charges on the debts the farmers owe.

The cause of the trouble is the lack of capital, and the remedy lies in financing the farmer and the landowner. This is the indisputable conclusion logically reached from examination into the actual conditions and from comparisons furnished by recent European history. The solution of the problem concerns the general welfare as much as does the currency and monetary reform, and it is gratifying to note that it seems destined to go side by side along with this undertaking. For as soon as the alarm was sounded the best talent of the Nation became enlisted, and now bankers, merchants, professional men, legislators, and private individuals in town and country, many impelled purely by patriotic and disinterested motives, have combined their efforts to better the situation before it pass to the acute and critical stage.

The establishment of agricultural cooperative credit associations is largely a matter for State legislation and encouragement. The making and the management of these little societies are so simple, and their success so inevitable where the environment is congenial to their growth, that without doubt they would spring up in multitudes as soon as the proper laws were passed. and in course of time develop systems as large and effective as those of Germany. A great many cooperative stores already exist in this country. Cooperation has been taught by farmers' journals for years, and the spirit of it is in the air. The organization of land credit, however, is a complicated task, especially since the idea is new in the United States and involved in a tangle of conflicting State laws and antiquated land-registration and taxation systems and foreclosure procedures. Many changes, amendments, and additions would have to be made in respect to all these before the way could be made clear for the formation of land-mortgage banks. In addition to the uniformity of laws, a uniformity of business methods must also be brought about. This means statutory regulations and limitations such as have been described in this report; and also official supervision. But this supervision need not be the bureaucratic kind of Europe, but similar to that exercised in the United States over national banks, savings banks, and public-utility corporations. Free scope for private enterprise and initiative should be allowed and encouraged, but the days of "wildcatting" in the United States are gone for good, and promoters should never again be given the opportunity to exploit the necessities of debtors and prey upon the public as was done during the farmmortgage craze 18 or 20 years ago.

The only instrument by which land-mortgage banks can finance themselves, draw money from the public for investment in loans, are the debenture bonds; but these bonds will not circulate freely nor far from the place of issue unless they are known to have the same underlying values and give the same rights to the holder. regardless of whether they be secured by mortgages in Texas, Massachusetts, or in any other States. But possessed of these characteristics as guaranties of law, there is no reason why debentures of large mortgage banks and Landschaften should not be listed in stock markets and sold, negotiated, and exchanged as readily as railway and municipal securities, and thus equalize and reduce interest rates for farmers throughout the country.

The objects of the investigations set on foot by the Departments of State and Agriculture have been accomplished. The public is aroused and the movement has finally been started for organizing the land credit and improving agricultural credit facilities in the United States. The nonpartisan character of the interest awakened clearly indicates the next step to be taken. The persons foremost in this movement should get together, open headquarters at some convenient place in the Middle West, systematize the work of propaganda, and see that it advance along similar lines in all the States. Special conventions should be held in those States where the needs are most urgent. Later on a national convention should be assembled, or at least a national committee appointed to sit in continuous session. Every effort should be made to secure the uniformity so much to be desired in State laws and to give a proper direction to any Federal legislation which should be proposed. Such is the recommendation of this report.

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BOYS' CORN CLUBS (SOUTHERN).

COMMITTEE ON AGRICULTURE,

HOUSE OF REPRESENTATIVES,

Washington, D. C., Wednesday, January 22, 1913. The committee this day met, Hon. John Lamb (chairman) presiding.

The CHAIRMAN. Gentlemen of the committee, we have the corn boys here this morning. Mr. Knapp, have you any of them who will make a speech to us? We are anxious to learn how this work pro

gresses.

Mr. KNAPP. Yes, sir. There are 22 from the Southern States and 18 from the Northern States. The young lady is from Arkansas. She grew one-tenth of an acre of tomatoes.

STATEMENT OF MISS VIOLA LEWIS.

The CHAIRMAN. Have you ever been here before?

Miss LEWIS. No, sir.

The CHAIRMAN. You are not a corn-growing lady, are you?
Miss LEWIS. No, sir; I raise tomatoes.

The CHAIRMAN. We would be glad to hear from you on your tomato project.

Mr. KNAPP. Tell them how many tomatoes you raise.

Miss LEWIS. I can not exactly tell you. When I started I planted one-tenth of an acre, hoed it, staked them, and tied them, and I gathered the fruit. I raised 175 baskets of tomatoes off of that land, 85 cans of them. I raised two patches of turnips and have one patch growing now. I had one patch of beans, which started to bear, and had a few beans on them and died because it was too warm. I made $52.80 off of my tomatoes. [Applause.]

Mr. KNAPP. How about tomatoes for family use?

Miss LEWIS. Yes, sir; we used them.

The CHAIRMAN. I suppose your brother worked and you watched him?

Miss LEWIS. No, sir; I did all the work myself.

Mr. MAGUIRE. How much time did you put in?

Miss LEWIS. My goodness, I could not tell you. I would run out off and on.

Mr. MAGUIRE. Did you go to school?

Miss LEWIS. Yes; I went to school.

Mr. KNAPP. I suppose you would like to have Prof. Martin read the records?

STATEMENT OF MR. MARTIN.

Mr. MARTIN. I think the most surprising thing in the South is that the boys have filled in the gap between the record we had before and the present record. The yields which ran to 100 bushels now run up to 206 and 207 bushels. We have had boys in our delegation who have gone up to 227 bushels, but the ears were not so well filled in along about 160 or 165. You will notice these yields run from 150 to 200 bushels, and in that respect they are a little different from the reports made by the delegation heretofore. William Atkinson, of Alabama, produced 198 bushels, and J. P. Leach, from the same State, produced 196 bushels. They were so close together that the people of Alabama sent both of them. In some of the Western States we have some cotton clubs that have developed since the corn clubs have been making progress. We have two cotton boys from Arkansas.

Walter Bridges, of Georgia, who is a very small boy, produced 156 bushels. That is his mother you see with him. [Applause.]

We have several from Mississippi. The State Bankers' Association put up the money to send them from that State. We are just now beginning to get yields above the Mississippi River above 100 bushels. They had not been using so much fertilizer.

Frank G. Brockman, of Virginia, produced 167 bushels, a magnificent showing.

Mr. LEVER. What county is he from?

Mr. MARTIN. Amherst. The chairman of the committee is from Virginia, and Frank Brockman is a Virginia boy.

The CHAIRMAN. Stand up, Frank. I am glad to see you.

Mr. MARTIN. I want to say that the cost per bushel this year runs down very low.

STATEMENT OF FRANK G. BROCKMAN.

The CHAIRMAN. Mr. Brockman, tell us how you prepared that land. We are all farmers on this committee, and we would like to know your experience.

Mr. BROCKMAN. The ground was broken March 26. 14 inches deep. You want me to give the fertilizers?

The CHAIRMAN. Yes, sir.

Mr. BROCKMAN. On May 1, I used a thousand pounds of lime and 300 pounds of bone meal, and put that in with a drill, and then I used a disk harrow on it about five times, and ran a cultivator over it, too.

The CHAIRMAN. How far apart did you have the rows?

Mr. BROCKMAN. I planted the corn May 23, in rows 3 feet apart, 9 or 10 in a drill, and cultivated it five or six times.

The CHAIRMAN. Did you cultivate it perfectly level?

Mr. BROCKMAN. Yes, sir; not over 2 inches.

The CHAIRMAN. You did not throw any furrow?

Mr. BROCKMAN. No, sir. I gathered it about October 12-11,000 pounds.

Mr. LEVER. What was the cost of the fertilizer?